Meyer Real Estate and Vacation Rentals is celebrating its 50th anniversary this year, and Sheila Hodges and her daughter Michelle have built one of the Gulf Coast’s largest and most respected vacation rental management companies with determination, professionalism and an ongoing focus on innovation.
Sheila, it looks like you became the broker in 1980 but acquired 100 percent of Meyer in 1995. How did that come to be?
Sheila Hodges (SH): The quote “From crisis comes opportunity,” truly describes what happened. In 1982, the partners at Meyer decided to split, and one bought out the other. The sole owner was what we described as the “back office” owner. In other words, he didn’t interact with sales agents but dealt in finance and the legal holdings of Mrs. Erie Meyer. Therefore, we had no idea who, how, or what in sales. I’m sure the sole owner of Meyer was also wondering who, how, and what. As it turned out, he optioned half of the company to a large firm in Mobile, Alabama to manage sales and vacation rentals here at Meyer. Although this was a large, successful brokerage firm, it had neither been in vacation rentals nor in a dominant second home market. Factoring those two learning curves in, along with not being able to be present every day, meant things did not go smoothly. I often pitched in to give my two cents’ worth to whatever situation needed it. After almost two years the Mobile firm opted not to exercise its option to purchase half of the company.
So in 1984, I was offered half of the company at a cost that would empty my savings and put all I had on the line. But at the same time I was assured I would be the “driver” with assurance my new partner would support, counsel, or stand back as needed. So after much deliberation I took the plunge.
What were some of the early successes and challenges?
SH: Now I have to trust my memory, but the first big challenge was to take the rental department from paper to computer. From the beginning, all reservations were kept on a calendar spreadsheet in pencil. You know, reservations get changed or canceled, so all was done by pencil. So if you grow the number of properties you manage, the paper spreadsheets grow also. It was obvious we had to go computer. Today, in our computer world, we still struggle with keeping up with technology or technology keeping up with us.
I remember the first time we went from six phone lines to a switchboard. We were told repeatedly by distributors that we were overreaching ourselves on switchboard requirements; any company our size requires a much smaller system—but we insisted. As all that technical equipment was being installed, the supplier said it had no idea we had so many calls in one day. All I could do was smile and say, “Now you know why we were insistent!”
That was a simple success, but there have been failures. Not once, but twice, I tried mortgage lending—both times were a dismal failure. This example could imply that I’m a bit stubborn.
I would be remiss if I didn’t touch on natural crises. Those huge tropical occurrences! (Author’s Note: No one along the Gulf Coast uses H-word). After a few storms you have a good plan for pre-storm preparedness and post-storm recovery. But never in history have there been two back to back, as in one each year. There were lessons learned in that, and one that sticks out is bandwidth. We had purchased dozens of cameras for staff to get out and photograph each property as soon as possible. We had so many photos on our website that we were getting as many or more views than CNN! In the middle of the day we got shut down for exceeding bandwidth. Thank goodness I was present in our off-site “warm site” to give them my American Express card to increase bandwidth.
Then there was the BP oil spill. I won’t go down that horrid rabbit trail, but yeah, we survived that too.
When did Michelle join the company and what prompted her to make that decision?
Michelle Hodges (MH): I’m probably no different than most eighteen-year-olds who have spent their entire lives in the same city. As I took off for college, I saw my future leading me away from Coastal Alabama and into a large, vibrant city where I could start my career and pave my own path.
Growing up, my mother was such a known businesswoman in our community, so the idea of escaping her shadow and building my own reputation was appealing to me as a teenager and young twenty-something. By my mid-twenties, I had completed a few internships, graduated from college with a degree in international relations and a minor in Latin American and Caribbean affairs, studied abroad, and traveled to nearly twenty different countries. It was tremendous fun, but as I seriously started considering a career, I couldn’t shake the connection I felt to the hospitality industry.
In 2006, I joined the Meyer team as a guest relations representative working at the front desk. In 2007, we switched computer systems from RMS to PropertyPlus, and each department assigned a team member to represent its needs in the conversion, which I had an opportunity to do. That opportunity greatly expanded my scope of understanding of each of our departments and how our operational processes were intertwined. One thing led to another, and I ended up in a full-time training position where I conducted everything from new hire orientation to customer service training and departmental training. The 2010 BP oil spill catapulted my career in yet another direction. I focused on a role with the Coastal Resiliency Coalition (CRC)—a group representing the communities of Foley, Gulf Shores, Orange Beach; our two local chambers; The Alabama Gulf Coast Convention and Visitors Bureau; and our community college. As a community, the events of 2010 created an “all hands on deck” atmosphere where we were all united toward not only surviving the crisis but also coming out of it stronger. While the CRC still exists today, and I am a board member, I refocused my attention on Meyer in the fall of 2011, and today I serve as president.
What differentiates Meyer from its competitors?
MH: This is actually a topic that our team spends quite a bit of time discussing. Change in our industry is increasing at an incredible pace. It is exciting to watch awareness of the industry expand and the ensuing “disruptive innovation” that follows such expansive growth. Renters’ expectations of a vacation rental are not uniform, and depending on their objectives, owners may also have a different set of expectations.
At Meyer, we make every effort to ensure our brand objectives are clear to not only those who do business with us but also our team members, who carry our core brand values. Some brands are niche oriented, and others are mass oriented; some are value driven, and others service driven. If you imagine an x and y axis with those focal points, there is a place in the industry for brands that are plotted in various places in each quadrant.
Wherever your brand value proposition is plotted, the important thing is to be aware of where you stand so your marketing efforts accurately reflect your value proposition. At the end of the day, we want those who choose to do business with Meyer to be brand advocates, and the best way to build such a relationship is by clearly setting and exceeding expectations. From the renters’ perspective and the owners’ perspective, our core brand values are characterized in the following words: personal, simple, and ready.
A lot has changed in the vacation rental industry. What steps do you take to address advancements and obstacles while keeping your core values?
MH: Much like our brand values serve as a reminder of our value proposition, our core values ensure that no matter what initiative or opportunity presents itself for our organization, we always maintain alignment with who we are and what we represent as a company.
At Meyer we believe in serving with integrity; conducting ourselves and our business in an honest, ethical, and trustworthy manner; treating everyone with care, respect, and fairness; providing financial stewardship; and growing through innovation and creativity. We believe our core values are timeless—they have served us well since they were created nearly three decades ago, and they are going to continue to serve as our road map into the future. Of course, we adapt to changes in the industry and world around us to help us maintain relevancy with each of our core values.
For example, over the past ten years, Alabama’s and Florida’s Gulf Coast tourism and the vacation rental industry experienced several challenges that impacted Meyer. In 2004, Hurricane Ivan hit Alabama’s coast and caused damage to many beach properties, resulting in lower bookings and revenues to the company. The economic recession naturally resulted in an increase of foreclosed rental properties and travelers substituting staycations instead of their traditional beach vacations. To make matters worse, the 2010 BP Deepwater Horizon oil spill reduced the number of vacationers to the Gulf Coast and the number of Meyer bookings by 50 percent nearly overnight. While these external events were occurring, competition for property management services and vacation guests increased on several fronts as well. First, the number of property management companies competing with Meyer along the Gulf Coast increased as small boutique management companies emerged that undercut the market’s traditional commission and service structure. Second, with the rise of the Internet and new business models, many beach property owners began renting their units themselves to deal-seeking vacationers, rather than contracting with professionally managed companies.
These changes in the industry landscape challenged Meyer’s position as an industry leader and created the need for the company to incorporate its core value of growing through innovation and creativity into its strategy map.
In 2013, Meyer engaged the Alabama Technology Network’s (ATN’s) Mobile and Auburn University Centers to help address its innovation and growth challenges through the implementation of a year-long Innovation Engineering Management System (IEMS) project. Innovation Engineering is a systems-thinking approach to innovation with a methodology that teaches individuals and companies how to create and test meaningfully unique ideas using a Fail Fast, Fail Cheap approach to reduce risk and increase speed to market and to create a system and culture of never-ending innovation. The system fit into our company culture so well that with ATN’s assistance, we decided to bring Innovation Engineering in-house and maintain the system to both encourage and manage meaningfully unique ideas into implementation. Two years into the program, IEMS became the catalyst for shifting our entire organizational structure to remain competitive in a changing market and better serve our property owners.
The changes enabled Meyer to manage like a small property management company while also leveraging the tremendous resources and expertise of a large property management company. Throughout the concept testing, Meyer measured success factors, including average time to complete work orders, owner hotline answer rates, and employee satisfaction, to gauge the impact of the change before fully implementing. Meyer’s “big personalization” concept resulted in a reduction in the average length of open work orders by 73 percent. An employee satisfaction survey measuring effectiveness, consistency, timeliness, empowerment, and teamwork showed an almost 100 percent improvement over pre-test results—up from 41 percent to 80 percent. Our core values were at work in a big way!
At Meyer, you are heavily involved in the community. How has this commitment benefited your business?
MH: We could talk about the numerous reasons community involvement is smart business. For us in Coastal Alabama, workforce development is a significant issue, and the future shift in a quality professional workforce starts today with the emphasis we place on education and our ability to create partners in education with local business leaders. We could discuss the merits of economic diversification, maintaining quality of life, driving public policy, or business advocacy all as drivers for involvement at a larger level. But, for me, it really does boil down to the fact that this is my forever home.
I was beyond blessed to be raised in the same community from birth to graduation. I have a passion for the community that helped develop me into the adult I am today, and I consider it a true privilege to be a part of ensuring the strength and resiliency of this community endure for the next generation.
As we celebrate Mother’s Day, what have you learned from each other and about working with family?
MH: My mom loves to share stories of me as a little girl—maybe not into kindergarten quite yet—asking her if one day she would let me be the boss. From an early age, I always admired the way her confident, professional attitude resonated when she left for the office. I often tried duplicating the feeling by dressing up in her suits and heels. But realization kicked in at some point in the teen years that the responsibilities she carried went far beyond her diverse closet. In addition to being a wife and a mother to four kids, she was paving the way for people to have a career—not just a job—in an up-and-coming industry where they could actually feel they were making a contribution. My biggest barrier to working for Meyer was the concern that my mother’s reputation was so great that I would spend my career in her shadows.
As I reflect on my last eleven years at Meyer, I recognize the tremendous guidance my mother provided me in those first years getting my feet in the water and, as I began to find my own contribution, how much autonomy to learn—whether through failure or success—she allowed me to have. At the end of the day, the success of our organization is an inside job and is dependent on each and every team member embracing our brand and core values and supporting each other with their own unique strengths and talents. It is truly a team effort.
What trends and opportunities are you seeing in vacation rentals today?
MH: There is obviously a significant amount of conversation taking place around the impact of a sharing economy in the vacation rental industry. We are in a unique position in Alabama because vacation rentals fall under the governance of the Alabama Real Estate Commission, which requires we maintain status as the merchant of record from the time of booking forward and that any guest deposits be escrowed into a state financial institution.
Although this may prevent certain partnerships from forming with us, it also protects the consumer from fraud and allows Meyer to remain in control of future charging needs or chargeback issues. In Alabama, the Real Estate Commission also requires that anyone managing a vacation rental property on behalf of the owner be a licensed real estate broker. This means that while individual owners may utilize third-party listing services and accept guest money directly, any non-owner managing a property on behalf of another individual must obtain a broker’s license to avoid breaking the law.
It is also interesting to look at vacation trends following an election year! National politics may be a surprise factor in planning a beach vacation, but local politics are proving to have a significant impact as well. For most Americans, vacation and holiday decisions are based on the security of their income and whether their outlook on their personal financial and job security is optimistic for the foreseeable future. Despite where you land on the political pendulum, with a new administration in the Oval Office, it seems nearly everyone is experiencing some level of a political honeymoon period.
A significant benefit of our gorgeous Gulf Coast area is that we are predominately a drive-to destination. This makes us an incredibly attractive option for both value-driven vacationers and last-minute destination seekers.
In local politics, the Gulf Shores City Council voted unanimously last December to renew the “no alcohol ban” during the 2017 Spring Break months. You may recall that in 2016, the city took fast and decisive action to avoid any potential transition of the Panama City Spring Break crowds that wreaked havoc on the reputation and safety of that destination through alarming media stories and an increase in criminal offenses. This has proved to be a pivotal season along our stretch of coast to unite in our message. Certainly, we welcome college-aged students who abide by our rental agreements and choose to spend their Spring Break with us to enjoy all our wonderful area has to offer—from our beautiful beaches to our diverse selection of attractions. But we are also committed to protecting the experience that all our visitors have come to expect—young and old, couples traveling solo, and parents traveling with children and grandparents.
What advice do you have for other companies working closely with family members?
SH: If you are the parent, step out of the picture. By that I mean you have a successful business because there are some things you are really good at, and those areas you are lacking you have managed to overcome by various means. Allow your children the same luxury no matter how painful. We often inflict upon our children the dreams that belong to us, and we never hear or view their dreams. We must allow the next generation to take the business to the next level if that is their dream. If that is not their dream then you do both the business and them a grave disservice.
I have four grown children, and only one had an interest in what I was doing and saw or felt inclined to follow. Yes, they held summer jobs around this industry but I waited through four college educations for there to be any interest in my career. I am ever so grateful for all four and their endeavors, but I will admit there is comfort in the fact that one knows and loves the business. But if it had turned out that none had an interest, then I am confident the good Lord would have sent just the right person to move us forward and upward.