The number one request for information from vacation rental managers (VRMs) we receive at VRM Intel is about listing site independence. VRMs are looking for new ways to increase direct bookings, but it is getting more difficult with HomeAway, Airbnb, Booking.com, and TripAdvisor competing for vacation rental market share.
In an interview with VRM Intel, Phocuswright Vice President of Research Douglas Quinby predicted that rental listing sites and online travel agencies (OTAs) will account for 78 percent of bookings of private accommodations by 2018. Over the next few years, the cost of booking through these channels is forecast to increase while the amount of customer data you receive is expected to decrease.
Continuing to find innovative ways to increase bookings outside of OTAs will become more important as costs increase and the amount of data received from those channels decreases. However, laying the groundwork for a profitable customer lifecycle is essential for survival in an OTA-led marketplace. Once the foundation has been laid, your marketing team can create and test new ideas knowing that a sound strategy is in place to convert leads to bookings and bookings to repeat stays.
Steps to Listing Site Independence
1. Measure Performance on Listing Sites
Knowing your performance on the channels you use is half the battle. Having the following metrics on hand will help you make the best decisions for your VRM and will help you compare the performance of each distribution channel:
- Number of leads
- Number of inquiries
- Average and median booking window
- Number of bookings
- Number of repeat stays from bookings
Pro Tip: Tracking additional information about leads obtained from channels can help you make marketing decisions and optimize your listings, conversion strategy, and retention plan. The following are examples of additional information that may be beneficial:
- Party size and type
- Feeder market
- Special needs (e.g., pets, accessibility)
- Reason for stay
If you don’t currently have a plan to track these metrics, you are not alone. But if listing site independence is a long-term goal, now is a great time to work with your reservations and marketing teams to implement a strategy that lets you start fresh in 2017.
2. Create and Implement a Plan to Convert Leads to Bookings
It is difficult to justify spending money to acquire leads from OTAs if you don’t have a strategic plan to convert those leads into bookings. An effective plan includes collecting and managing lead information, selling to leads, and remarketing to leads.
Collect Lead Information
Leads and inquiries are not the same thing. As Heather Weiermann points out in her article “Demand-itis”, the prospective guest is the lead. Often, a single lead will send several inquiries across multiple channels for information on your properties. The most effective and efficient way to manage leads is by using a lead management system that is part of or integrated with your property management software.
Without a lead management system, your reservation agents will need an internal system to manage leads and merge inquiries manually. Depending on the size of your company, that task can be overwhelming. Track the time it takes to manage leads internally and conduct a cost-benefit analysis to determine if you are better off purchasing a lead management tool.
Implement a True Sales Strategy
Like any other business, a proven, measurable sales strategy that follows through the customer lifecycle is a necessity.
The articles “Increasing Revenue through Reservations” and “Demand-itis” provide beneficial sales tactics. Keep in mind that, as a VRM, you are competing with homeowners in the sales process, and the response and follow-up from homeowners is highly personalized. Respond with your strengths. If you are using an autoresponder, use language that communicates trust and professionalism (i.e., 24/7 service, professional housekeeping, keyless entry, additional amenities, and offerings). In addition, some autoresponders have artificial intelligence tools that can help personalize responses.
Create a Remarketing Plan
If you missed the sale this time, chances are the lead will return to your destination. By creating a marketing plan to retarget leads, you increase your chances of reaching guests on their next trips. Besides general email blasts, consider special automated marketing based on the following factors:
- Stay date
- Date of inquiry
- Reason for stay
3. Create and Implement a Plan for Guest Retention
Repeat guest bookings are the lifeblood of VRM revenue. According to a recent study by Phocuswright, four of ten vacation rental bookings in 2015 were made online, and that number is expected to increase to 55 percent by 2018. As a result, direct interaction with your guests is decreasing. In order to have a business model that is sustainably independent of OTAs, it is critical that you develop an effective guest retention plan.
Personalize Your Relationship with Guests.
According to Phocuswright’s Douglas Quinby, travelers who stayed in owner-managed rentals reported higher levels of guest satisfaction that was driven by increased interaction with the host or owner. With the increased adoption of keyless entry, VRMs are challenged to create a meaningful connection with their guests. Talk to your team and brainstorm ways to play to your strengths to personalize the guest stay.
Collect emails from all of your guests, not just the one who made the reservation.
Unlike hotels, the average stay for vacation rentals includes three to five people—depending on the destination—and it is not uncommon to have eight or more adults staying in a property. In many cases, the person who made the reservation was not the decision maker in the booking process. Consequently, you will find it beneficial to discover methods to collect contact data on all guests staying in your properties. Here are a few ideas:
- Guest Apps: After the booking, guest apps provide tools to capture data from guests not listed on the reservation (i.e., emailing key codes).
- Internet Access: Use branded landing pages on the guest’s access point for Wi-Fi that collects names and emails. Silicon Travel is one company that provides a solution for Internet access landing pages.
- Activities Promotion: When you book activities for guests, capture emails from all adult guests who will be participating.
- Surveys and Reviews: As you reach out to guests with surveys and reviews, find tactics and incentives to reach all the guests who stayed at the property.
- Pool Passes, Parking Passes, and Amenity Access: Many condominiums and communities require passes for shared amenities and parking. One idea is to require a record of the guest’s name, email, city, and home state in order to receive passes/access.
Target repeat guests with special offers and reasons to return.
Phocuswright’s recent study also showed that travelers who stay in vacation rentals take more trips per year than those who stay in hotels. Target those guests with special offers, event information, and reasons to return. Make an effort to communicate differently to guests who live in drive-to markets vs. fly-to markets. In addition, like your remarketing efforts to leads, automate marketing messages based on stay date, date of inquiry, and reason for stay.
4. Optimize Channels
Once you have implemented plans to measure your performance, convert leads, and retain the guests you have, then it is time to optimize your listings on OTA channels. Here are eight tips to update and enhance your OTA listings:
- Monitor changes to OTA’s search algorithms and listing component recommendations. OTAs are constantly revising their sort criteria (e.g., HomeAway’s Best Match). Each quarter, take time to review the changes and adapt accordingly.
- Take new professional photos. The size recommendations for photos on OTAs are changing, so make sure your photographer understands your photo size requirements.
- Add an office photo to your listings to promote your brand and communicate professionalism. Just don’t add language to the caption that violates the channel’s terms by encouraging guests to book directly with you.
- Add floor plan images (or links if allowed).
- Use language in your listings that is professional, descriptive, and authentic. ProofreadingPal.com is a great tool to ensure that your descriptions are grammatically correct. Promote your strengths and professionalism (see Housekeeping Marketing for more tips).
- If a property meets special needs, make sure to include that fact in both descriptions and photos (e.g., pet-friendly, kid-friendly, easy access to activities, accessibility for older and disabled guests).
- Don’t forget to write great headlines. Like search results in Google, merely appearing in the top results isn’t enough. Your headlines need to appeal to travelers searching for the right vacation rental.
- Review amenities. Check your listings to make sure all the amenities associated with a property are displaying properly.
Pro Tip: Keep in mind that your company’s website is your most important channel. While you are optimizing your listing channels, make sure your website is providing a professional impression, updated photos and descriptions, compelling headlines, and an easy booking path.
OTAs provide an effective way to attract guests to your company. With increasing costs, it is essential that you accompany your OTA strategy with an effective plan for conversion and retention. 2017 is the right year to lay the foundation that takes advantage of OTAs but that is not reliant on them.