Only after publishing this week's Unlocked Interview with Eric Broughton of InhabitIQ -- who is buying up various property management software companies -- have I (finally) come to (fully) understand the (irreversible) way our cottage industry is evolving:
But when it comes to small vacation rental players, is there a saving grace?
The DNA of what makes the vacation rental experience popular (to guests) is "one of a kind" individuality, which fundamentally conflicts with the dynamics of consolidation. (If you haven't listened to this podcast featuring LindaS -- it's a powerful lesson in this discord.)
Which means, if you are building a small, high-quality, Limited Edition business, you are effectively distancing yourself from commodity rentals and disqualifying yourself from the cycle of consolidation. And as we have seen lately, that can also turn into a pretty nice exit too. So why not double-down on these aspects that only we can emphasize, commanding top dollar in the marketplace, attracting only guests who admire and respect our operation, and doing what we love on our own terms?
I'd like to end this thought-process with a mantra: "Build your limited edition vacation rental business as if you'll own it forever, but could sell it tomorrow."
- Starts out fragmented = large number of small players
- As popularity grows, a smaller number of larger players begin to consolidate the fragmentedness
- They do this by either a) acquiring smaller players or b) directly competing with smaller players using the unfair advantage of economies of scale (ie. cost reductions that result from increased production)
- As popularity continues, that consolidation cycle continues in waves: with an even smaller number of even larger players entering and consolidating the consolidators.
But when it comes to small vacation rental players, is there a saving grace?
The DNA of what makes the vacation rental experience popular (to guests) is "one of a kind" individuality, which fundamentally conflicts with the dynamics of consolidation. (If you haven't listened to this podcast featuring LindaS -- it's a powerful lesson in this discord.)
Which means, if you are building a small, high-quality, Limited Edition business, you are effectively distancing yourself from commodity rentals and disqualifying yourself from the cycle of consolidation. And as we have seen lately, that can also turn into a pretty nice exit too. So why not double-down on these aspects that only we can emphasize, commanding top dollar in the marketplace, attracting only guests who admire and respect our operation, and doing what we love on our own terms?
I'd like to end this thought-process with a mantra: "Build your limited edition vacation rental business as if you'll own it forever, but could sell it tomorrow."
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