VRMA Administrator
Technology in the vacation rental industry has expanded significantly in recent years—from “smart home” to software-as-a-service (SaaS) applications, digital guidebooks, noise detectors, mobile applications, and more. In an ideal world, every system in your vacation rental tech stack would help you automate tasks, reduce costs, grow revenue, and deliver a five-star guest experience.
In the last three years, vacation rental technology demands have been further shaped by new trends and unprecedented challenges, including the need for contactless check-ins, growing competition from other vacation rentals and hotels, record bookings, labor shortages, higher guest expectations, inflation, continuing fear of COVID-19, and more. It means the need to be more efficient, generate more revenue, and help create fantastic guest experiences is greater than ever.
“In-property technology can bring tremendous value throughout the entire value chain, providing a win-win for everyone” says Suneel Goud, Vice President at Sharp NEC Displays, makers of the interactive concierge GuestView Guide. “It can provide greater visibility for owners, an enhanced experience for guests, simplified or eliminated tasks for employees, and a better bottom line for property management companies.”
The Tech Stack Costs
It would be great to blink our eyes and have each of our rentals magically outfitted with the latest and greatest technology: keyless locks, high-speed Wi-Fi, digital guidebooks, noise monitoring, smart TVs, smart thermostats, and more. To see five-star reviews after every guest stay. To field fewer calls and texts from guests. A stronger bottom line. Spending less time managing the operations of the business.
But, of course, even if that were possible, there are other costs to consider when evaluating your tech stack. The obvious ones—cost of the products or services, cost to set up, cost to maintain, cost to train yourself and your staff—all go into determining what’s right for you.
The other side of the equation is the value these investments bring to your business. Some value can be quantified in dollars and cents well, but others are less tangible and difficult to measure. However, collectively, they determine where to spend your money. When determining the value, it’s important to consider all stakeholders: guests, owners, employees, and the company.
Owner Experience
Many vacation rental management companies focus on increasing their inventory as a primary element of growth. That has the potential for a great ROI. You just need to be aware of the variables in that strategy—basically determining what a new property is worth in revenue to you, how much it costs to acquire it, and the long-term value versus the cost to acquire. A little math and you can see if that makes sense for your business. A single new property could be $20,000 to $100,000 in gross bookings annually—what does that mean for you?
Brooke Pfautz is founder and CEO of Vintory, a platform dedicated to helping vacation rental managers recruit new homeowners. “We definitely recommend highlighting ‘differentiators’ when marketing and selling new homeowners,” Pfautz says. “When we meet with our partners during onboarding, we want to understand what makes their business unique. Then we ask, ‘What technology are you using that makes you stand out? Where is the sizzle?’ We then highlight the heck out of that differentiation. Prospective owners love this. It shows that they are on the forefront of technology, and it sets the tone of how they run the rest of their business. In summary, it is a critical part of their key messaging.”
Mathew Durrette, founder and CEO of Cozi Vacation Rentals, says, “Owners schedule meetings with me every week to do property tours. They want to see the tools and technologies that make us successful. They’re blown away when we show them.” That helps them compete and successfully acquire new owners.
Guest Experience
The ROI of your guest’s experience can in part be determined by the percent who re-book with you, especially direct. Some studies have said only 20 percent of travelers remember who they stayed with 60 days after checkout. That means you’re already battling long odds. A great experience will help them remember; it will increase the referrals they provide; and it will increase the likelihood that they’ll rebook with you directly. And, of course, five-star ratings and great reviews are also important for success. A 2021 study of 6,500 US shoppers showed 98 percent of consumers consider reviews an essential resource when making purchase decisions. Star ratings also matter, with 77 percent of consumers indicating it’s an element they also consider. But consumers trust them more when accompanied by written reviews. Your ratings also affect your OTA search rankings.
In a VRM Intel article on hospitality technology, Jeremy Gal, founder and CEO of Breezeway, a property care and operations platform, said, “We can expect increased competition from hotels edging into the vacation rental market. Technology that helps professional vacation rental operators deliver ‘hotel-like’ guest experiences and services will continue to be a critical piece of successful management.”
Employee Experience
A standard way to evaluate the ROI of some technology investments is how much time they save staff or how much additional staff time they require to learn and manage. For example, Savannah Luxury Rentals estimates the average support call lasts about 10 minutes. Multiply that time by their fully loaded cost—meaning salary plus benefits plus taxes plus insurance—and you determine the cost and savings of each tech investment.
A member of your staff might make $30 an hour, $45 an hour fully loaded. So that 10-minute guest support call costs roughly $7.50. Multiply that by the average number of calls that person might handle in a month, and it can really add up.
A major issue in the vacation rental industry is the shortage of labor. And there’s more than just the cost of your staff’s hours to consider. Hospitality and leisure industry workers are quitting at the highest rates of any industry, with a record number of job openings in 2021.
According to an FIU News article, some of the reasons include challenging hours often involving nights and weekends and holidays, the need to suppress emotions because you want to provide good service to guests “with a smile,” safety concerns with COVID-19, and much more. It’s not just about the cost of your team’s time but about the cost to replace them if they leave, as well as the critical need to use often limited staff time as efficiently as possible.
Job satisfaction is paramount. You want to make sure your staff is happy and stays at their job. That they don’t experience burnout. That people you recruit will find your company appealing. Technology that makes their job easier can help make them and you happier.
Company Experience: The Bottom Line
Ultimately, the combination of these experiences is a key part of evaluating the in-property technology you currently use or should evaluate to use in the future. It’s also becoming a vital part in the success or failure of most vacation rental management companies.
The right technology choices can help you recruit new owners, attract and retain a happy staff, deliver great guest experiences, and outperform the competition—all of which makes for an enviable bottom line. With this, you'll be better prepared to overcome current and future headwinds faced by the vacation rental management industry.
Chris Taylor is the head of marketing at GuestView Guide.
