New technology, greater distribution channels, major acquisitions, new regulations and more! As the state of the vacation rental industry continues to transform, Mike Copps, VRMA Executive Director, sat down with VQuarter to give his take on the winds of change in the market.
Below is the full interview (Portions of this interview were originally published on VQuarter at http://vquarter.com/expert-interview-mike-copps-vrma/)
What do you feel have been the most important developments in the vacation rentals market in the past year?
Copps: On a broad level, technology. That’s been the answer for years now; it’s the focus and sophistication of the technology that changes year-to-year. Distribution technology continues to be one of the hottest topics, as it ties into marketing strategy; what are the best channels to use? How do companies maximize exposure while minimizing reliance on single distribution channels? That diversification and empowerment is really key, and we’re seeing that pop up everywhere. We’re going to have a big focus on this at our upcoming conference in October in Orlando; from distribution/OTA users groups to marketing sessions/boot camps to successful large-scale/enterprise VRMs sharing tips around finding the right balance in a marketing portfolio. There are many approaches and opinions, and it’s best to know your options. That’s what we’re trying to provide.
But technology’s impact is far beyond marketing and distribution; advancements in the actual guest experience, such as smart homes and concierge services, are also playing a huge role. How can traditional vacation rental managers best service the guest to keep them coming back? A walk through the exhibit hall at our conference gives a pretty good idea of all of the exciting changes in these areas.
On the opposite end of the spectrum is regulation; this isn’t new this year, but there are new issues and opposition popping up constantly in new locations. This is incredibly important because some of these regulations threaten the very livelihood of our members and traditional vacation rental mangers; companies that have been in business for decades, well before the sharing economy was a thing and well before half of the words in my “technology” answer were even in the lexicon. It’s a fundamentally treasured aspect of the tourism economic ecosystem and a basic right of citizens in the U.S. and beyond, yet the new found popularity and demand is threatening some other business models that are pushing back hard. Getting in front of this is a monumental effort that is going to require all of our stakeholders to work together. Not surprisingly, this will also be a focus at our conference but is also an on-going thing; we just launched our advocacy website, VRMA Voice, which is a start at building this community at the local and state levels to push back. This fight isn’t going anywhere anytime soon.
Why do you think vacation rentals are becoming more appealing than ever before?
Copps: A couple reasons. Tied to the technology answers, the option is just more prevalent now. The supply is easier to access, so the demand is increasing. That accessibility—as easy as a few clicks on your phone—certainly enhances the appeal.
But also, on a more personal level, the need to detach and separate to really decompress and relax is more important than ever. We’re tied to our jobs and our phones and email non-stop; getting away is harder than ever and when we do it, we want it to really count. We want a longer vacation. We want to be with our loved ones, with larger groups of friends and family. The most relaxing time of my life, every year without fail, is staying at a vacation rental. There’s something incredibly special about being somewhere new and having new experiences while living in your space, your own private surroundings with people you know and love, for an extended amount of time… it’s an experience you can only have at a vacation rental.
What tips would you give to a vacation property manager on how to provide the best service to their guests in 2017?
Copps: I mentioned a couple earlier; guests want an outstanding experience and that’s something that can really make a management company stand out. From that first touch point, customer service always has been and will be essential. Easy access to all the information they need, and knowing where to turn if they need more. There are all kinds of systems and services to provide those touch points from initial contact to post-vacation. The onsite experience is also key; guests want a seamless, easy experience with cool features at the property and fun things to do in the community. The aforementioned smart homes and concierge services are two tools that can help enhance these experiences, either done in-house or using a third party.
Name the five technology trends you predict will have the biggest impact on the vacation rental market in the future.
Copps: I’ve mentioned a few, but they’re worth mentioning again:
Distribution. There’s so much going on in this space right now; what channels to use, what to do on your own, who to partner with and when… there are so many variables here and so many different models and preferences that this area is clearly going to continue to grow in relevance and importance. With the expansion of mobile usage and utilization of aggregators and channel managers and even new technology not yet seen in this space, this will continue to shift and it will be fascinating to experience.
Property Management Software. This is not a new trend by any means, but finding the right system and solution to manage your properties and align with your marketing efforts and ultimately the guest experience is incredibly essential; this will continue to be the case. No matter the website that a guest uses to find a vacation rental, once its found, a whole string of operations of various complexity go into effect. Being on top of that is key. Features, functionality, integrations; we’ll continue to see innovation in this space, as well.
Smart Homes. We’re seeing new developments here from keyless entry to smart home thermostats to personal assistants; this area will continue to expand as guests are looking to experience cutting-edge technologies and owners and managers are looking to cut costs and add efficiencies. Those aren’t always mutually exclusive concepts.
Regulation Compliance. That doesn’t necessarily sound like a sexy tech trend, but with increased regulation and interest in developing regulation at the local and state level, there are some really cool developments taking place in the tech space to deal with—or better yet, pre-empt—regulations. Devices that track decibel levels and then alert managers of issues to avoid the “party house” claims by neighbors, security cameras to track activity such as occupancy and parking, guest verification and property damage alert systems, devices that actually track the number of cell phones in a property to ensure occupancy limits are being adhered to… really interesting stuff taking place right now, and I’m sure a lot more to come.
Virtual Reality. I’m throwing this one in because it’s such a hot topic in the VC world, along with artificial intelligence. I think the latter will take a little longer to hit our industry, but virtual reality is already making a dent. Some of our members and suppliers are already offering immersive 3D tours in properties; it will be interesting to see where this goes and how much of the guest experience and expectations can be managed up front, and what other implications and opportunities there may be.
Data. I’ll add a sixth, and it’s not a true technology trend but will ultimately be disseminated through technology. That’s industry data. This has been a historically fragmented industry with data points collected in thousands of different manners by different companies. There is a real need for unbiased industry data that can do a few things. From my perspective, most importantly, we want to provide data that empowers our members to make better business decisions and operate more efficiently. Key performance indicators and benchmarks and predictive analytics. There are companies and organizations occupying various corners of this space; VRMA will be one of them. Additionally, industry-wise, there is no clear indicator of exactly how large this market is, in the U.S. or abroad. How many management companies there are, how many managers managing multiple properties, how many properties managed by all of these companies. The economic impact of these vacation rental on a larger level; there’s good data out there but it’s not consistent or collective enough. This will help us from an education standpoint, from an advocacy and government relations standpoint, and will help the industry as it branches out internationally, like the pending expansion in Japan. And ultimately, data that would help the end user make better decisions as a consumer. It will be very interesting to see how this all takes shape.
As vacation rentals continue to grow, how do you think property management companies will cope with the expansion of their businesses?
Copps: Those that want to grow certainly have an outstanding opportunity to do so right now; scaling efficiently is always an incredibly difficult task, regardless of industry, but some of these technology trends really provide an opportunity to do so in this space. On a macro level, many of the above tools can be scaled to different locations—local, state, regional, even international. But there’s still an importance of that local knowledge and connection that is difficult to do without feet on the ground. The cleaning, maintenance, guest and owner relations, community relations and local business relationships and partnerships that enhance the guest experience and, worst-case, help push back on restrictive regulations. These are all considerations that must be addressed when expanding beyond your current scope of operations.
On an industry level, we need to work together to cope with the expansion of awareness and the resulting regulations. Really distinguishing the traditional professional vacation rental manager from all the other newcomers in this space is going to be key. Many vacation rental managers clearly use tools of the sharing economy to aid in distribution, but we are very clearly not the sharing economy. So much proposed legislation and regulations lump all “short-term rentals” together; from sleeping on someone’s couch who just started listing it last week to renting out an entire beachfront vacation home professionally managed by a company that adheres to high operational, regulatory, and ethical standards. These things couldn’t be more different. They should be regulated differently. But it comes down to awareness; we need to do a better job telling our story and differentiating all these players in this space. You will be seeing much more on this from VRMA in the near future.