Where Are We Headed?
8/2/2018
Just 10 short years ago, our company entered the Breckenridge travel industry as a “newbie” vacation rental manager. VRBO, HomeAway and Expedia were all different companies, built for different purposes. HomeAway was barely three years old, and they had just acquired a fledgling VRBO. My current property management system (PMS) was not in development and its predecessors were DOS-based programs. Mobile sites did not exist, and the first iPhone had just been released. We communicated with our guests strictly through phone and manually typed emails, with no automation within the guest servicing process. Our booking calendars and wholesale availability were managed individually, manually, with no real time availability or rates. The idea of self-managed properties was rare, and any talk of regulation on a state or local level was unheard of.
I joined VRMA in 2008, hoping to leverage its industry insight and knowledge to build my fledgling business, and though my relationship with the organization has been successful, I don’t think anyone could have been completely prepared for the absolute explosion in travel technology and industry growth that would occur over the next 10 years. Our industry has grown, both internally with new technology and opportunities, and externally with a growing market share and the development of new business models. Though the path of the industry may be unclear, as it was to me in 2008, I believe we can count on several inevitable and needed changes within the industry as we move into 2018 and beyond.
Where are we headed as an industry over the next 10 years?
Tech vs. Touch- have we abandoned our guests, and left their experiences to technology?
Technology has enabled managers to become more efficient and profitable, giving rise to a new generation of rental managers, built around standardization and automation. Guests book on responsive sites, receive confirmations via triggered email and are managed by mobile applications and remote locks whenever possible. Managers have learned to rely more and more on technology to fulfill what used to be a manual and personal process. This could be a costly weakness for our industry as we merge, acquire and figure out new and dazzling ways to distance ourselves from our guests in the name of efficiency and automation.
We must be careful, as an industry, that we maintain our appeal to consumers as a unique experience compared to hotels, complete with quirky properties, knowledgeable and localized guest servicing, and the catered personal touch that only a professional manager can offer to a guest. Our industry is built on relationships, not rooms, and we must ensure we focus on developing Guest Relationships as we adopt technologies to ensure our businesses are more successful.
The future holds a choice we must make both individually, and industry-wide. Do we become alternative hotels, or do we continue to be the preferred alternative to hotels? I believe we will see a balancing of the technology boom, not by slowing down technology adoption, but a renewed focus on the ability to personalize vacations through staff and customer service training, a renewed focus on the guest experience, and operational improvements centering on encouraging direct personal contact with the guest at every opportunity.
Will the king travel brands continue to prevent a personal guest experience to harness data?
Data, as it has been since the early days, is king in the travel industry. It is much easier to keep a guest than capture a new one, and with a solid email marketing platform and strategy, companies can easily succeed in driving return business. Capturing guest emails is a cornerstone of both marketing, and also guest services. In the absence of this information, servicing guests prior to arrival is impossible, resulting in a poor pre-arrival experience for the guest and a confusing check-in process for everyone.
The practice of “masking” or withholding guest emails is certainly not new in the travel industry, but as more booking sources become transactional, this practice has become more widespread. What used to be “lead generation” resources for managers have become transactional wholesalers, who have adapted the strategy of collecting and utilizing data to drive more booking revenues, taking between five and 25 percent of the overall transaction. On top of what can be a high transaction cost, now managers are being prevented from communicating directly and freely with guests during the pre-arrival process, with the end goal of keeping managers from marketing to these guests directly, and therefore more dependent on utilizing these exact transactional booking channels.
As our industry drifts more towards transactional, and wholesalers take the role of managing the guest lifecycle, we can expect to see additional efforts to separate managers from contacting the guest directly. However, this practice will ultimately fail for a couple of fundamental reasons, driven by guest needs and manager efforts.
First, there is no wedge large enough that can be driven in between the guest and manager during the pre-arrival process, which will not immediately vaporize at check-in when managers have the opportunity to meet and service guests in person. During this moment, a savvy manager will ensure they have every possible contact method of the guest so they can manage their vacation experience in full, and each guest will desire to be in direct contact with their vacation host to ensure they can access the knowledge and resources only the local manager retains. Ultimately, the process of keeping managers and guests in silos will fail, as it should, due to an inherent need to make vacations emotional and personal ventures that can only be successful in the presence of a functional guest/host relationship. Booking companies will continue to invent new ways to “protect data” at the expense of the guest experience and it will continue to be swiftly rejected by manager and guest upon arrival.
What is a professional manager?
The components of a successful manager are knowledge, resources, proximity and scale. Each of these components is necessary to succeed in the world of vacation rental management, and each used to be unique to the professional industry as they take time and dedication to develop. The industry was built around professionalism and business acumen, until the mid-2000’s, when VRBO opened the doors to a new generation of owners, and a new type of management.
During the last 10 years, owner-managed properties have become mainstream, with technology enabling an individual owner to possess many of the tools and resources of a professional manager. Limited service management companies have sprung up to meet the new demand of property services, and new booking websites have appeared to provide increased awareness and distribution of individually managed properties. Recently, several booking sites have even rolled out tools for owners to operate within a limited property management system, including options for travel and damage insurance, tax remission and dynamic pricing tools.
At the same pace, what used to be travel sites and companies that were dedicated to individual owners have developed distribution relationships with professional managers, increasing their inventory and revenue potential. Managers have begun to partner with owners who like to market their own properties, expanding online distribution for the owner and bookable inventory for the manager. The lines that used to define owner and manager have been blurred, if not totally erased for some.
As we move forward, a new dedication to our craft is needed, and a keener understanding of what the current definition of “professional manager” means is in order. It is no longer enough to rely on technology, and carry out our operations as we always have. We must be the ones to redefine “professional manager”, and rededicate ourselves to making a clear delineation between owner and manager. We must hold ourselves to a higher standard, and lead the charge to grow professionalism industrywide through education, credentialing, training, execution, product adoption, and industry knowledge. The future requires an elevation of professionalism within the industry, a new dedication to guest services, and the widespread discovery and adoption of knowledge by managers which will lead the industry into new and exciting areas of development. Collaboration between managers within the industry is key to effectuating these changes, and there have never been more opportunities to work together, challenge each other, and move our industry forward to redefine what it means to be a professional manager. We are ready, the time is right, and we must capitalize on our opportunity to ensure a bright future for professional managers.
Regulations and Professionalism
Working with governmental entities to adopt a common-sense model of collaboration and oversight in our industry.
With the growth of our industry has come increased recognition, and not all of it has been positive, both on a local and national level. Locally, stories of loud and irresponsible guests invading quiet residential communities, throwing trash about, parking in roads and causing disturbances are commonplace. Nationally, we hear about the lack of regulation and oversight leading to unsafe situations for guests, irresponsible owners not collecting and remitting tax revenues, and vacation rentals causing a crisis for long-term housing options in resort areas.
In reality, though these things do occur at times, they by no measure define the professional management industry, or measure the positive impacts we have on our communities. Professional managers tend to be combined with irresponsible owner-managed units, taking responsibility by proxy for people who do not subscribe to our standards of care, operations, professionalism and community.
For the most part, professional managers are very public people; being part of the communities they manage properties in as homeowners who raise their families. This is quite a different scenario than is experienced by individual out-of-town owners, and gives local professional managers all the encouragement they need to ensure the impacts to their community are positive, rather than negative.
In addition, professional managers donate time to local boards and committees, donate lodging to local events and organizations, employ local families, create jobs, and contribute to positive economic impact within their market areas.
Local governments can be misinformed about the vacation rental industry impact within their communities, and it is up to us to collaborate with our local governments, ending confusion, establishing positive interactions, and guiding the discussions around regulations. We must begin to think of regulations in terms of “professional vs. irresponsible management”, rather than “government vs. vacation rentals” if we are to encourage future success in combating negative regulations within our industry. We must engage with and work side-by-side with our local governments to address nuisances, safety, impacts on infrastructure, housing challenges, and tax remission to eliminate the negative influences in our areas and demonstrate the professionalism and value of the vacation rental industry.
As I have said, the future for our industry is bright, and success will be measured by our ability to adapt and provide the experience our guest’s desire. No doubt, 10 years from now, we will all look back in awe of how rapidly the change occurred, and how far we have come. When we get there, let us have led the change, advanced the industry, and demonstrated what it means to be a professional vacation rental manager. This is our responsibility, and we must all contribute to the future if we are to look back on a path of success.