Studies show that vacation rentals are good for the local economy. How can we amplify this narrative?
“People make decisions with their guts and rationalize them with facts.” It’s an important rule that I’ve come to live by, especially when it comes to raising venture capital. In the past decade of my career, I’ve learned one indisputable fact: stories have the power to transform the world.
The largest companies in the world have long understood how to tell stories that are self-serving. Coca-Cola, a soda company, led a young generation into a new perspective with their slogan, “I’d like to buy the world a Coke.”
And stories can be used for good, too. Take 16-year old Greta Thunberg, a climate activist, whose most recent story ─ a journey across the Atlantic in an emissions-free sailboat ─ has inspired millions of people to rethink the way they treat the environment.
For vacation rental companies, storytelling usually comes into play for marketing ─ and it works. Leading companies like Park City Lodging have developed a brand narrative that positions them at the center of their community. Potential guests are excited to rent from a company whose values reflect their own. It is with pride that Park City Lodging employees spend time on volunteer events like park cleanups or donation drives.
Now, vacation rental companies must use stories for a new purpose ─ to spread the truth about the economic impact of vacation rentals and advocate for common sense regulations and policy. Because if we don’t, then the story becomes someone else’s.
In my own city of San Francisco, we’ve seen how a flawed narrative ─ that vacation rentals lead to a shortage of affordable housing ─ has dramatically influenced policy. Lawmakers have hooked on to this story and have used it to garner support even though the logic has proved false.
How can vacation rental companies use stories for good? How can we tell an accurate story about the countless positive impacts that vacation rentals have on the local community? Consistency is key. We need a common framework.
We identified three key areas where vacation rentals have a positive economic impact, and began asking companies to tell us more about that impact:
Impact on Local Employment - Sample Questions
- Within your company, how many jobs do you create?
- How many other companies employ people who work on vacation rentals?
Impact on Local Income - Sample Questions
- Within your company and other companies, how many individual people and families live off of income earned from vacation rentals?
- How much rental income do travelers bring to your area?
- What is the tax benefit that your regions receives from this revenue?
Income on Local Commerce - Sample Questions
- How many local businesses benefit from vacation rental traveler spend?
- How much commerce do vacation rental travelers bring to your area?
We developed a questionnaire (with questions similar to the above) to help companies gather their own data. It was inspiring to hear from companies in different regions around the country about how vacation rental companies are helping their local economies thrive. But somehow policymakers were deaf to these stories and persistently voted against common-sense policies. What more can we do to bring this to light?
We took a step back and found one big gap: that vacation rental companies didn’t have a way to measure the economic impact they were having on their communities. Without data, the stories were falling flat.
So we built a tool that helps vacation rental companies analyze local economic impact with self- reported data. It starts with a 15-minute questionnaire that captures basic assumptions about vacation rental travel in a specific region. This includes questions about average occupancy rates, stay length, traveler spend, number of local employees impacted and income earned from vacation rentals. We have helped several regions so far to create their own detailed report on local economic impact.
- First, the economic impact that vacation rentals have on their respective regions is not small − it’s actually gigantic. For example, in the Ottawa-Gatineau region, annual economic impact from vacation rentals was $181 million. In the Finger Lakes region, it was $277 million, and in Tahoe $295 million.
- Second, we learned that companies are dramatically underestimating their impact on local employment. The income from the vacation rental industry not only supports the employees in the management company, but also the cleaners, maintenance workers, gardeners and snow plow workers of a region. Just one management company in South Lake Tahoe, realized that 6-7 local companies’ primary revenue source ─ that’s 30-40 local workers and their families ─ came from that single business.
- Finally, the report unearthed touching stories about local business owners and families becoming more successful because of vacation rental travel. This included sponsoring an art installation that transformed a waterfront park, helping kick start a local brewery, funding the development of a new community center and helping support local firefighters. And this is where it started to get fun.
With a local economic impact report in hand, vacation rental companies can wield a new tool for advocacy. Companies can demonstrate the immense positive impact that their business has on the economy.
Best of all, they don’t have to do it alone. A consolidated report showing the positive economic impact helps companies to bring in allies ─ whether local business owners or community leaders ─ to help make the case. Allies will tell anecdotal stories that match with quantitative findings in the study. It’s a classic marriage of the qualitative with quantitative, a recipe that works.
For policymakers, this combination of stories that constituents are excited to talk about, coupled with facts, is compelling. Policymakers need to justify their decisions to the public − they need stories that travel well. Stories that are meaningful and memorable. And they need data to back it all up. It’s a winning combination.
And now we’re back where we began. The vacation rental industry needs to harness the power of stories to help people make better decisions. We need to do a better job of controlling the narrative − with meaningful stories that speak to the heart. And we also need to do the legwork to satisfy our fact-loving minds.
To generate your own local economic impact study and to showcase how much economic impact vacation rentals have in your region, please go to Hostfully.com/impact to get started.
From Issue 6 of Arrival, 2019
Margot Schmorak is CEO and Co-Founder of Hostfully.com, a software provider with property management software and digital guidebooks. Previously, she launched the first iPhone Developer Program at Apple and led Marketing at ServiceSource (NASDAQ: SREV). Margot holds an MBA from the University of Michigan and a BA in Economics from Vassar College. She lives in San Francisco with her three kids and husband Ari.