The current vacation rental environment is full of distractions, so much so that vacation rental managers (VRMs) could be compared to kids in a candy store. There is no shortage of new technology, varied business models and operational tasks that compete for the attention of VRMs. It’s easy to shift your focus and chase seemingly more productive opportunities for the business or allocate company resources toward perceived underperforming areas. Are these real problems or just distractions?
In working with hundreds of management companies over the years, we’ve found that VRMs sometimes lose focus of certain fundamental tenets within the business. While the industry continues to change, so many things have stayed the same. It is those aspects of the business that have remained constant through the years that are missing in many companies today.
No amount of theorizing, efficiency or technology can make up for good service.
Too many companies in today’s environment are overlooking service basics. Start with the willingness to provide exceptional service. While these functions can be aided by technology, the key component of service is manual. Training your team to understand and cultivate service opportunities with owners and guests can help ensure your operation orchestrates a culture of exceptional service. This culture creates trust and trust leads to long-term relationships. Trusting, long-term relationships are the foundation to a sustainable vacation rental company. Focus on this aspect of your business and you’ll have a successful, sustainable, long-term business operation.
Infrastructure. Yes, web-based management companies sound great and are seemingly more profitable. More companies are trying to manage properties from afar. However, having an effective infrastructure will position your business as a local resource. Having local resources will allow your business to commit to, and perform, effective oversight and maintenance. The best owners and properties in any given market require a management partner that can execute locally. As owners continue to care most about revenue generation and care of their property, it’s really hard to protect the latter when your business is not in market. Establishing a fundamental infrastructure will allow you to fulfill your responsibilities to owners and guests more effectively and have better control of your business operations.
Profit. VRMs continue to underperform industry-wide when it comes to profit and positive cash flow. The problem is that many VRMs may not have proper financial accounting procedures to assimilate good or actionable data. The key to a profitable business starts with having accurate and consistent financial statements. Accuracy and consistency breeds reliability and trust. Once in place, the business can further manage expenses and can further drive profits. Operating a business with a meaningful profit margins is paramount. It leads to long-term sustainable operations, which can help business owners weather natural disasters or economic downturns. Focus on financial results and drive profit.
As VRMs and the industry continue to evolve, it’s important to note that not all areas of the business are changing. Industry needs are very much the same as compared to years past. Remaining focused on fundamental components of the business can help ensure your business continues on a sustainable path.
From VRMA Arrival, Issue 3, 2019
BEN EDWARDS has been positively affecting the real estate and vacation rental industries for nearly 20 years. Weatherby Consulting can also help enhance the value and profitability of your Vacation Rental Operation. Please feel free to contact Ben Edwards at Weatherby Consulting should you have any questions about meaningfully increasing your profit margins via email at Ben@WeatherbyConsulting.com or telephone at 888.304.1405.