What a month! From winding down our busy season to the stress of having to deal with Hurricane Matthew, to the rush of attending the 2016 national VRMA conference, this has been one of the fastest October’s ever! Being so heavily involved in our industry association, the VRMA, it really gives me a front row seat to the rapidly evolving vacation/short-term rental business. Every year, along with my duties on the board of directors, I get to attend and learn from some of the brightest minds in the industry at our national trade conference. While I’ll admit, the content can get a little stale now and then, this year really blew me away! From new products and services being introduced to the investment in technology in our category, to the educational sessions themselves, I believe I had more adrenaline to keep pushing forward at our business, Topsail Realty Vacations, then I have ever had!
I’m going to do what many other do and try to condense down the biggest takeaways for me from this past conference, although there is a lot more I could discuss. In no particular order:
- Technology adoption is not a luxury.It has been evident over the past few years that the vacation rental industry is going through a “growing up” phase when it comes to business processes. For years, we as an industry have been relying on basic software and manual processes to run our businesses. This is not necessarily a bad thing; however, it created some pretty difficult obstacles and risks for error that made our jobs that much harder. We are the best are creating more work for ourselves than is what is necessary. At the VRMA conference this past year, there were more vendors displaying new technology-based products and services than I have ever seen. Some of these are not new, but they have been greatly enhanced and developed, leading to a more realistic chance of usage by the vacation rental management community. At Topsail Realty Vacations, we have already implemented some of these tools, like smart home keyless entry systems, CRM and reputation management software, cloud based phone and communication systems, and channel marketing integrations. However, it is important to note you need to be very thoughtful on what and how you use these new and evolving tools. Having technology for the sake of having technology just confuses staff and can make it that much harder to run an efficient operation.
Bottom line, in our view, to perform at the level that is expected by our homeowner clients today, embracing and making a concentrated effort to implement new technology is a must.
- Dynamic Pricing is taking center stage.In my opinion, this one still as a little way to go, but the point is well taken. Pricing our vacation rental homes on a seasonal basis is one of the most important jobs that we have as vacation rental management professionals. This has historically been an extremely manual process using limited data, and mostly resting on past performance as the sole factor for forecasting future performance. While this method is still valid, there are a lot more variables today in our online travel world that, in all likelihood, affects the optimum price to make a booking.
In continuing with the technology theme, there are a number of newer companies that are attempting to help tackle this problem for vacation rental managers. By using algorithms and online tools, these companies are able to use large amounts of data for a particular area using listings on HomeAway, AirBnB, and other online travel sites to help give better information when pricing for a particular type of property, for a particular time period. It is the hope that this will eventually help arm vacation rental managers with the kind of data and information that will lead to much more fluid and “dynamic” pricing model, that could potentially change daily or weekly, depending on the variables that are set. If this is the case, the days of “setting it and forgetting it” will be over. Imagine having a base “rack” rate per season, that can then be adjusted down or up automatically based on booking windows, events, or yearly demand. I can tell you this is something that we are looking at closely to see how it continues to evolve.
- Expedia and HomeAway are figuring it out.I don’t think many industry insiders were surprised when Expedia ultimately decided to acquire HomeAway for $3.9 billion last year. Because of the sheer size of Homeaway and their weight in our industry, many were apprehensive about how such a huge player like Expedia was going to further change our business. In my opinion, I feel like the positives so far have outweighed the negatives. To be fair, most of the more public changes with HomeAway’s platform were in the works before the Expedia acquisition, however, I feel the Expedia tie in has really helped make these changes much smoother.
It is very evident that Homeaway/VRBO/VacationRentals.com is becoming a transactional marketplace. The days of the listing/classified site where anyone can pay for a top tier subscription and ignore their calendars, not update pricing, take forever to respond and still get maximum exposure are over. The most noticeable change that favors more automated and sophisticated processes include what Homeaway refers to as “Best Match”.
“Best Match” is HomeAway’s algorithm change that determines which listings are displayed first for a particular search. There is a host of variables that determine this but mostly include completely up to date information about a home, lead response time and instant booking capabilities directly on HomeAway’s sites. Topsail Realty is able to automatically control this due to our Software integration directly with HomeAway and VRBO.com, which we foresee will give us an advantage as this continues to be implemented.
With the increased exposure and technical expertise Expedia will give to Homeaway, we are excited to continue our partnership with them from a marketing and software standpoint.
- Offer an “Experience” not just a rental.Probably one of the biggest eye openers for me was during Phocusright’s Douglas Quinby’s presentation “Private Accommodations in the US: A Market Transformed” when their research showed roughly ½ of all rental travelers in the U.S. are now 35 or under! No doubt you’ve heard the term “Millennial”, which is the reference to this generation and how large they are (full disclosure, I’m one of them!). Douglas mentioned this now influential group in travel love vacation and short-term rentals, however, their expectations are for a more turnkey stay experience, with hotel-like amenities and services. To this end, this is one reason why Topsail Realty is moving to give your guests a more “all-inclusive” stay experience, with fresh linen and towels and the beds made, and coming soon, a dedicated concierge service to help them with everything from local restaurant recommendations to grocery delivery service!
We understand that change is not always the easiest thing to embrace. However, it is our job to do the research, attend educational events like the VRMA conferences, and find ways to stay in front of the larger trends to keep our homeowner clients competitive in a rapidly evolving industry.