A decade ago, vacation rental owners and managers paid “listing sites” such as VRBO and Homeaway to accept their property information and use this information in the form of advertising to attract travelers (both new and returning customers).
It began as a helpful and inexpensive advertising service. However, once a listing site achieved a critical mass of inventory, the game changed to the detriment of everyone but the big sites.
As vacation rental managers (VRMs) and homeowners, we were in a rush to save money but had no sense of the long-term, bigger picture. We did not ask the tough questions, like “Where do we think this will leave the traveler and the vacation rental industry five years from now?”
As a result, the traveler is ultimately paying more, and the owner/manager is beginning to see margins shrink. As with any disruption in our industry, we must evolve in order to prosper.
Understand Your Distribution
Now more than ever, it is critical to have a solid understanding of how and where your property data are distributed. Having a diverse split of booking channel revenue ensures that, if one channel goes down, you still have other channels you can rely on.
Complacency tends to blind us when everything is going well, and in the first quarter of this year, many owners and managers paid the price for their dependency on one channel. The keys to long-term success are diversity and focus. Those who planned ahead are benefiting from the other options available to them. In today’s market it is important to understand how your data are performing at local and regional levels. By rationalizing the data, you can get a clear view of how your Brand (intentionally capitalized) is performing in the marketplace versus the noise coming from outside. Using hard data also uncovers opportunities to “get local” that will keep your Brand strong and relevant to the traveler. This is something big sites can never achieve.
Pillars of Success
We can all agree that there are many levers to pull in operating a successful professional vacation rental management company. The most critical pillars to success in this business are marketing, operations, and finance.
Marketing is the foundation of our business, as it allows us the opportunity to build up the other pillars. It is important to have a monetization strategy in place for every traveler who comes in contact with your Brand. Having this strategy in place will allow you to navigate industry changes, leverage opportunities that benefit your business, and be better able to predict future success in your business. Building a stronger marketing foundation will do wonders for your asset value.
Learning from Hotels
Admittedly, hotels and vacation rental accommodations are not the same. That said, there is much to learn from the hotel industry in how they approach marketing and managing their Brands.
Part of brand management involves managing your inventory (rooms or properties). Hotels are very proactive in managing their Brands’ positioning in the marketplace. They can exert control of their Brand by controlling inventory (assets) with online travel agencies (OTAs). Hotels also keep their data separate from the OTAs and proactively market to every traveler who comes in contact with their Brand. One of the most difficult lessons we have learned in the past few years is what happens when you put all your eggs in one basket.
An all-in-one property management system (PMS) can manage your OTA channels for you, but is that always the best decision? We recently worked with a VRM who had been using the same PMS for ten years. When the VRM decided to make a technology change to his business that improved his outlook for the future, the PMS pulled out . . . along with their data for the past decade! This serves as a cautionary tale of what happens when all your eggs are in one basket. Partner with a PMS provider that offers an API, giving you the flexibility to make the best decisions to add value to your business. Partner for your success . . . not theirs. Having this mindset insures that all parties involved are invested in a positive outcome.
Engage Travelers Intelligently
Who would have ever thought that the change from the “Inquire” and “Contact Us” buttons to the “Book Now” button would have such a critical impact on our business?
Communicating directly with the traveler provides an opportunity for unique engagement with the traveler and gives the traveler an opportunity to build a relationship with your Brand. It also insures a higher degree of success in delivering the perfect vacation rental experience.
In the “Book Now” world, if you have not set up a marketing strategy for conversion and retention, now is the time. It makes no difference if you are new to the business or well-established, if you have one property or hundreds, how you present your Brand to the traveler will make a measurable difference going forward. Implementing an engagement and retention strategy will allow you to intelligently monetize every traveler contact, make better channel and technology selections, and understand the true impact of your Brand’s performance.
Know What Success Looks Like
- Lead with your Brand first in every interaction you have with the traveler, and carry your Brand’s message through the entire lifecycle of the guest experience. Travelers have expressed a direct intent to stay with you. Make sure they keep your Brand at the forefront of their minds.
- Establish a strategy for conversion and retention based on previous guest experiences, event-driven motivations, and traveler intent. Social media is an excellent tool for communicating positive messages and driving traffic back to your site.
- Monetize every traveler lead. Regardless of where the lead originates, capture the data and have a plan in case the lead does not book.
- For those who do book, keep them coming back and sharing their experiences. Repeat guests are a direct reflection of your ability to deliver on your Brand’s promise. At every opportunity, highlight your guests’ experiences and ask them to share these with your audience.
- Look for ways to work with your professional community. The power of combining powerful local Brands increases traffic; increased traffic builds positive traveler awareness, and positive traveler awareness strengthens Brands.
Having a solid understanding of how your Brand is performing will net higher conversion rates, increase repeat guests, and build a funnel of intent that will secure your Brand’s foundation for years to come.