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Vacation Rental Tech to Thrive in the Next Five Years: Experience is the Next Frontier

Every restaurant was closed at 9:00 PM. Phoenix airport shuts down early. Rather than a couple barstools and industry gossip, we settled into stiff airport seats to talk shop.

I started in the vacation rental industry in 2008 as a Marketing Director on the Outer Banks. I began following Matt around the same time. We were on similar paths - both focused on online marketing for the emerging vacation rental industry.

Our paths eventually diverged. I moved to the vendor side, and Matt continued to build his marketing/coaching/media influence. I've been a fan ever since.

We sat in the Phoenix airport awaiting our red-eyes, and our discussion turned to the next five years. How will the vacation rental industry evolve, and what technology do professional vacation rental managers need to thrive?

I nudged the Outer Banks towards online marketing in 2008. I introduced PointCentral to the vacation rental industry in 2012. I championed Breezeway to help close operational gaps in 2019. Most recently, I was the VP of Sales for Inhabit IQ with the goal of consolidating tech/services for the first time in the VR industry. My wife and I also manage a small inventory of homes on the Outer Banks.

This background has steered my perspective on the future of the vacation rental industry and the tech needed to excel in the next five years.

Matt enjoys questions. I obliged with answers. Those answers have evolved into this article.

The vacation rental industry is maturing rapidly - faster than many of us would have predicted. The growth (managers, guests, homes, funding, etc.) since 2008ish is staggering. And COVID pushed the adoption even faster.

There are a number of trends developing as the industry grows and matures. These trends drive the "tech" that is needed to excel in the next five years.

I’ve shared the trends I see evolving and the needed “tech” to thrive below. Before we tackle the details, let’s establish three overarching takeaways…

  1. You are empowered: You are empowered to dream big and act accordingly. If you are in the short term rental industry, then you are part of the evolution. The time is now to be bold. Build the teams, businesses, and industry you are proud of. You are the Hilton’s and Marriott’s of tomorrow! 10X your life and in turn we will 10X the industry.
  2. Focus on experience: Experience is everything. Literally everything. We use “experience” to think about processes and systems, but experience is every small detail in those processes and systems. Pay attention to the details. Pay attention to the emotions that are created by your systems, your teams, and your homes. Create positive emotions and your clients will return.
  3. Nurture your passion: Love what you do. We are helping people spend their hard-earned money to enjoy an amazing vacation. Hospitality is about a passion to serve others. We are their guides. It is a privilege to be entrusted as their vacation expert. The vacation rental industry was built on this passion for hospitality. Nurture this passion in yourself, your teams, and the industry. Your guests and homeowners will feel your genuine passion. The industry will thrive with this passion.


Experience is the next frontier

Guest experience is the primary factor in ALL of hospitality. Our job is to create great experiences. Guest expectations are rising. Experience must be a top priority - easy, clean, safe, exceeding expectations. With that said,,I use "experience" loosely. Vacation rental managers serve two clients - guests and homeowners. Without homes, there are no vacation rental managers. Homeowners will demand great experiences as their expectations continue to rise. Extend this trend further, and we will see the property manager/vendor experience improve as well. We all return to businesses that provide great experiences.

Funding will flow to vacation rentals
Vacation rentals are a great investment - homes, vacation rental management companies, and vendors. Funding will continue to move into the industry. This is great - funding brings opportunity. But sources of funding are important.

Is the funding institutional, private, family, or debt?

Institutional funding comes from large institutions, like a bank. This is not a loan - IE debt. This is direct investment with the expectation of an exponential return. Institutional funding brings great opportunity for growth and development due to the large amount of available capital - no surprise, banks have a lot of money. Access to large amounts of capital also brings high demands. Institutional funding will typically have a shorter exit strategy and no acceptance of missed revenue targets. The funding will drive business decisions with the ultimate goal of return on investment. Banks are beholden to their investors.

Private money is similar to institutional money. These are typically professional investors with high demands. However, private funding is more flexible. This is a group of business people that can make business decisions. They will have an exit timeline, revenue targets, and rate of return they are targeting, but they can also pivot easier if needed. They do not have shareholders to worry about.

Family money is more flexible than private money. Again, professional investors with demands, but families usually have strong relationships with each other and the companies they fund. Strong relationships create a cohesive environment. Timeline, revenue, and return are important, but the health of the company is also crucial - team, product, and client.

Debt is taking business loans from a bank. Similar to a loan on your car and/or home, businesses can also get loans. The business must be healthy, run well, and earning a profit for a bank to provide a business loan. The bank needs confidence the business can support the monthly payments. The interest rate on the loan will be lower than the above funding sources, and the bank has no input on business decisions. The bank is trusting the business owner to run the business and make the monthly loan payments. Debt is the strongest position for the business owner, which should translate to a secure position for the team, product, and client.

Ask about the funding sources. Ask about the exit plan. Ask about the exit timeline. Make sure your partners' priorities align with your priorities.

Regulations are everyone's problem
The wave of regulations will increase in the next five years. A drastic increase.

EVERY market will be impacted by regulations. It could be as simple as a small licensing fee. Or the regulations could be as drastic as full bans on short term rentals.

The key is to ACT NOW. Be part of creating well-thought-out regulations before you are caught fighting irrational regulations created by interests outside of the industry.

The opposing view is well-funded. Now is the time to form coalitions to protect your vacation rental market. And our livelihood. Actually, yesterday.

Consolidation is cool
Trends are difficult to battle. Some are worth the fight - IE irrational regulations. Consolidation is a natural force that has gained momentum across the industry for years. It will not slow in the next five years. In fact, it will pick up pace over the next five years.

I’m a fan of consolidation in the short-term rental industry. Consolidation brings economies of scale as small companies join forces. Consolidation has the potential to generate fresh ideas as great teams come together. Consolidation offers exit strategies to business operators when the time is right.

However, consolidation is tightly woven into the above funding discussion. As companies consolidate, what are their plans - funding, exit strategy, exit timeline, product/service plan, industry stewardship, client focus, long-term view?

We are in the eye of this consolidation storm. It is not easy to choose the best strategies yet. But we can see differences beginning to play out. How does Vacasa’s IPO strategy work vs. VTrips debt strategy? How does Track’s family business funding drive results vs. Inhabit IQ’s institutional funding? How do each of the private fund raises we see on LinkedIn play out?

Every funding announcement has strings attached. Who is pulling those strings and what are their motives? Not always easy to discern, but crucial for you, your team, and your business as you make key business decisions in the next five years.

Perhaps they are all winning strategies, but we are sure to see differences as the strategies are executed. One company lays off employees to reach profitability, while a competitor remains profitable and maintains staff. One company rolls acquisitions into the brand, while another maintains the brand identity of the acquired brands. A small brand hires fast to grow and support the recent funding, while another brand takes smaller funding to stay focused on its niche. These are large visible examples, but there are endless small decisions being made on a daily basis.

How will the everyday decisions play out over the next five years? Hard to tell, but your focus should be on a) choosing like-minded partners and b) maintaining as much control of your business as possible.

Vacation rentals are HOT! Consolidation will continue. In fact, consolidation will increase - property managers will consolidate, vendors will consolidate, guests will consolidate. Guests?!? Yes, guests. Think about hotel and credit card points, apps with a unique niche, vacation rental points (?!), or vacation clubs.

We are all snowflakes
Matt refers to quality vacation rental managers as "limited edition." Every vacation rental manager has the opportunity to share their unique voice - we are small businesses that can maneuver quickly, we manage Instagram-worthy homes with unique flavor in fantastic locations, we know how to live like locals, and we have the connections and knowledge to cultivate limited edition experiences.

You are a local. That is your superpower!

Find your unique voice and use it. Your guests and owners will love it. You are a limited edition with a limited edition voice. The OTA’s may beat you in SEO due to website size and marketing spend, but they can’t touch your local knowledge.

Share videos. Take pictures. Interact on social media. Be yourself. Tell the world why your market is amazing and you are the authority on all of the hidden treasures.

Matt had Lauren Madewell on his podcast, and he predicted Lauren Madewell Lauren Madewell will be the voice of the professional STR industry. Lauren is a fantastic example of finding your voice and using it.

Take a look at a few suggestions and examples in the marketing discussion below.

With that said, the vacation rental snowflakes still need consistency and standards - think safety, security, and cleanliness.

Standards are the tie that binds
Industry standards are coming. Professional managers have developed personal business standards for years. But take a poll at a VRMA conference, or ask a competitor down the street, and the standards will vary widely.

As mentioned above, regulations are coming to every market. These regulations will evolve to include market and industry standards. Needs may vary by market, but there will be a core of expected standards.

Safety will be the primary focus for standards. There is no easy solution to safety standards across millions of unique properties with no official inspection infrastructure.

Accidents happen at hotels, but safety standards and a history of inspections meeting the standards are evidence the hotel, and the industry, is doing all they can to provide a safe hospitality experience. The vacation rental industry cannot say the same. Hotels will not allow us to continue without standards for much longer. They will shoot for bans. We need to self-correct now and control the narrative.

As an industry, we will solve the safety challenges. Follow Justin Ford to learn what you can do to improve safety ASAP.

In addition to safety, I can see security as a focal point (keys need to be gone ASAP!), perhaps sanitation scores, noise level restrictions, business verification (avoid fake listing scams), and background verifications - guests, employees, vendors.

Standards are kryptonite to poor regulation. Standards open us to new markets (government?). Standards differentiate professionals from amateurs.

Standards won’t be easy to develop, execute, or enforce, but they will be worth the effort.

A slowdown is here
A shift is underway. The COVID travel boom is coming to an end. Downward pressure is building.

We have not seen economic pressure like this since 2008.

2008 seems like a lifetime ago. Especially for an industry that has evolved so quickly since the last economic slowdown. COVID was a blip that started as one of the scariest times in travel history and quickly rebounded into the biggest inflection point in vacation rental history. Not a true slowdown. A protracted economic slowdown brings a set of challenges not seen in 14 years.

The nightly news is happy to remind us that economic concerns are spreading. Indicators are beginning to show for short term rentals. Nights booked are down. Available properties are growing - especially in the shoulder seasons. Nightly rates are showing signs of being pushed down.

Revenue goes down as reservations and rates go down. Homeowner income is reduced as revenue is reduced. Operations will be strained as personnel and expenses are spread thin. Homeowners will be very vocal and demanding when mortgage payments are in jeopardy. Guests will begin to push for discounts.

As an industry, we are going to work harder to book and service every reservation - more marketing efforts at greater costs for guests with higher expectations.

The same can be said for homeowners - as reservations slow and pricing is pushed down, homeowners will struggle with the higher expectations built during COVID vs. the reduced revenue potential of today.

Finding new guests and keeping homeowners happy are crucial to excel as the market slows.

Revenue is king
As long as we're here to make money, revenue will always be king. But vacation rental revenue is maturing. The days of set a commission and open your doors are gone.

Fees are ever-evolving - you probably can't open your doors without them. Revenue Management has quickly become a standard - evolving tech and evolving personnel. Commissions are difficult to increase. Rates are beginning to normalize. The next revenue evolution will be experiences - Airbnb has been talking about this for's coming. Remember, you are THE limited edition!

Operations is the heart of your business (and the industry)
This is not a new trend. It is a forever trend. Vacation rentals are hard because Operations is hard. This is especially noteworthy for anyone new to the industry - do not underestimate operational challenges. I'm a fan of the Mike Tyson quote: "Everyone has a plan until they get punched in the face." Every day in Operations is a punch in the face. More focus and more funding is needed in Operations. Remember the above notes on Experience - Operations is critical.

The above trends will drive the technology needs for successful vacation rental managers in the foreseeable future.

Vacation Rental Management Tech Stack for the Next Five Years

Below is my perspective on the VRM tech stack for the next five years. I'm using "tech" loosely to encompass a variety of uses/needs. These are high-level descriptions. I'll name-drop on occasion, but this is directional thinking, not a full analysis. Each of the topics deserves an article of its own. I've ordered these in priority, but every business has unique priorities.

Property Management System (PMS)
Your property management system (PMS) is your core. Everything else builds from your PMS. This makes your PMS decision critical. But don't stress too much, odds are you'll switch from time to time.

The industry has been looking for a clear PMS leader for years. Having worked in the industry intimately and attended pretty much every conference on the circuit, I can assure you: There is NO clear PMS winner. Every VRM has unique needs, and these needs change over time. Every PMS has pros and cons, and the those pros and cons adjust as the software evolves over time.

Do your homework. Look at reviews. Ask your peers/network. In the end, make a choice and go. Put the energy into a quality setup - this is on you as much as the vendor. At the same time, focus on their Support - great customer service makes up for mediocre software, and poor customer service can ruin the best software.

Accounting is non-negotiable. Strong accounting in every PMS is the expectation. PMS companies must put a primary focus on accounting. Managers leave bad accounting for better accounting.

Talk with managers that use the PMS accounting to know if it will work for you. You will leave quickly - and waste resources - if the accounting does not meet your needs.

Marketing is near and dear to my heart. Every VRM is a limited edition if they choose to be. For emphasis, I'll repeat my statement above - we are small business that can maneuver quickly, we manage Instagram-worthy homes with unique flavor in fantastic locations, we know how to live like locals, and we have the connections and knowledge to cultivate limited edition experiences.

You are local. You are a limited edition.

I've walked in these shoes, so I'll say it - vacation rental marketing is simple. Not easy, but simple. You live in amazing destinations where people flock to spend their hard-earned money on experiences you enjoy every day.

Create and share content regularly. It's that simple. You have so much to share - all of your limited edition qualities. And your guests and homeowners are hungry to consume the content.

This is an example of my approach to Outer Banks vacation rental marketing from 2008-2012. I’ve been out of the game for a while, but the game hasn’t changed all that much. Content is still king…
  • Website: Your website is your storefront. It’s crucial to get this right - easy to navigate to search and book with the fewest clicks possible. Deep pages with quality information that your clients need/search for. Your website is the cornerstone of online marketing and SEO, but it’s pretty stagnant. Google loves updated and current information. Google also loves when your site is viewed as the authority on a given topic (keywords are important, but I’ll leave that for another discussion) - one way Google judges authority is by quality links. Use content to create quality links.
  • Blog: You have a blog, right? If not, hit pause and start one. Make sure your blog is tied to your website and viewed as one by Google - your website vendor can help with this. Your blog will be updated daily, and it will feed your other social sources. Google will love that you update your blog daily. You will link to relevant sources in your blog posts, and those sources may in turn link back to you and/or share your posts. Google will love your links as you become the “authority”
  • Content: OMG! What are you going to post every day? Again, keep it simple. Find great sources of current information, build a content calendar, and develop recurring themes/posts. Promote your market, attractions, partners, events, team, processes, homes, news, etc. And do so in your voice. Every market is unique, but here’s my example from the OBX.
    • Start with a great company overview video. It can be expensive to hire professional videographers, but this video will share your limited edition VRM. It’s worth the investment and can be used for a while (years?!?).
    • Set up Google Alerts for your location, your company, your staff, your competitors. Google will email you every day with links to relevant online articles. Use these daily alerts to generate blog post ideas, and link back to the original source. Events, history, news, etc. Add your voice with a quick overview. Boom - quick blog post completed.
    • Start each day with video and photos. Push these videos and photos to social networks. Bring the videos and photos to the blog for quick posts. Your clients consume information from a variety of sources - try to meet them where they are. And consistency is key. Google, blog, Facebook, Instagram, YouTube, TikTok, LinkedIn, etc.
      • Instagram photo everyday. Perhaps multiple times per day.
      • YouTube video everyday. Find a reason.
      • OBX example: Beach/attraction photos and videos everyday. Monday/Wednesday/Friday = OBX Moment of Zen with just a video of the waves rolling in. Tuesday/Thursday = Surf and fishing report.
    • Make sure your blog posts are automatically pushed out to your social sources. I have used Hootsuite and Buffer to automate the push to social.
    • Partner with local companies to promote them and offer discounts to your guests. See my discussion on experiences below. In the company video above, you’ll hear me discuss Club Seaside. We created this 10+ years ago, and it is still live today. We promoted local businesses, and in turn, we were able to offer free experiences to a group of guests each week. We created strong local partnerships, we created great guest experiences, and we created content.
    • In less then five years, I posted over 1K blog posts at Seaside Vacations. I know, it seems basic and simple. It is! Consistent basics over time win. This marketing game is about consistency to build your voice/brand as the go-to source of information for your market. I’m happy to say Seaside has continued my path on the blog posts, videos, and pictures. Love it!
    • Find great content creators and follow. Art is imitation. Find great ideas, imitate, and add your voice to make it your own. Be creative. Have fun - marketing if fun, vacations are fun, you and your market are fun.

You will need marketing tech. Marketing tools is an article of its own, but here are some tools I’ve had success with…
There are also great marketing companies that know vacation rentals well and are happy to help. I’ve had success with marketing vendors in a few areas: Websites, Pay Per Click (PPC), and email marketing.
However, your biggest marketing strength is your local knowledge. Leverage this as much as possible. I highly suggest you own your blog, pictures, videos, and social. Be genuine. Find your voice.

Industry data has come a long way in a short time. There are great minds focused on bringing you strong data. Invest in data and take time to understand it. The data will help drive your business decisions. You can also repackage the data for marketing - especially for homeowner acquisition.

Focus on data for marketing, revenue management, and homeowner acquisition. Your decisions will become sharper, and you will stand out from competitors that are not listening to the data.

There are a variety of strong data sources. Pick one and go - something is better than nothing.

Revenue Management
Revenue management has been discussed in the industry for 10+ years. The tech and industry knowledge were lacking.

No more - tech has arrived and the collective industry knowledge is deep and getting deeper. Revenue management has become a standard component of an established tech stack.

If you are not using a revenue management software and reviewing data on a regular basis, I promise your competitors are - you are leaving money on the table and losing guests and homeowners.

As the industry slows, finding the right price at the right time is crucial.

Homeowner Acquisition
Homeowner acquisition is one of the most important aspects of every vacation rental business. You are in business because you have homes. Your business grows when you add homes.

Homeowner acquisition is also one of the most challenging and underserved areas of the business. Until Vintory arrived in 2019 - hat tip Brooke for executing on a critical need.

Acquiring great homes to grow an inventory has always been a cornerstone of vacation rental management. Now there is tech. This tech is quickly becoming standard. More options are coming.

Remember when phones were easy? Plug in the landline, and you were ready to dial. Not anymore. There are a lot of phone choices today. You need a phone system. I'm impartial to the options. VOIP, land line? Not sure.

However, here's my suggestion - in the next five years you'll want to record calls. You'll want calls tied to a CRM. Maybe even a guest CRM AND a homeowner CRM. I know, crazy, but true. Your PMS is probably thinking in this CRM/Phone direction, but still worth considering 3rd parties.

I expect to see development here - in the PMS and out.

My perspective on this topic surprised Matt. I spent 7 years in the keyless/internet of things (IOT) space. I championed the IOT concept for vacation rental managers in 2012. In 2022, I am much more focused on keyless than IOT.

Hardware has diminishing returns - it requires installation, maintenance, and updates. Is there value in energy management and water detection? Sure, but there needs to be serious consideration of costs vs. benefits. I would include energy management and water detection as options in a revenue-generation discussion.

On the other hand, keyless is an expectation. COVID pushed this adoption over the tipping point. The client experience is much better when it’s keyless. Hard keys are also inherently unsecure - who has a key, how are they tracked, have they been copied. Keyless locks solve these concerns immediately.

Who to choose? I'm a fan of simplicity. I want to know my codes are in the lock when expected. I'll sacrifice real-time control for operational confidence. Kaba is strong for simplicity.

As mentioned in the above trends, Operations is the heart of your business. And the heart of the vacation rental industry at large. Maintenance, cleans, and inspections at unique homes that could be miles apart is no easy task. Now do it all in 4 hours on a turnover day! Operations require a Herculian effort from amazing teams.

If experience is the next frontier, then Operations is the vehicle that gets us there. Guest and homeowner experience is made, or broken, by Operations.

How do you schedule your team, enforce processes, record tasks, report issues, update your guests, and share data with your homeowners? It’s time to evolve from Google Sheets.

Your PMS may offer some of this functionality. Great. However, odds are you may want to check out Breezeway sometime in the next five years.

Internal Communication
There are a variety of options here. I suggest you'll end up with some sort of internal communications tool(s) - Slack, Teams, text, etc. Your teams need to communicate in real-time, perhaps with multiple tools. I know, crazy, but it's the world we live in.

Improve communications, increase operational efficiency and pace, and record a history to review if needed.

Internal communications is at the core of Operations.

Guest & Homeowner Tech
This is an area that will see attention over the next few years. There are some 3rd party apps and some PMS online logins for guests and/or homeowners with limited info, but this tech needs to be prioritized by development and managers.

I think we'll see valuable improvements here.

Apps were cool until they weren't cool. Apps may become cool again. But only if they are useful - no one has time for an inconvenient app. A good comparison is a conference app. Do you download the VRMA app? Do you use it?

Apps can provide critical information quickly if they are well-designed and integrated across the appropriate systems. There is opportunity to provide great experience with guest and homeowner tech.

In-House Tech & Experiences
I'm surprised to take this stance. I'm going to advocate for the value of Amazon Alexa in vacation rental homes. I was at PointCentral when Alexa was released. I was a believer in in-home voice/speakers. But it was short-lived. Alexa sits unplugged at my house.

I'm a re-born Alexa supporter for the vacation rental industry. But it's not just Alexa. It's Alexa + local experiences.

Rember, Limited Edition + Experience.

I've only had limited discussions on this topic, but I saw the light. My suggestion is to talk with Tom Kenyon at Xplorie - he may open your eyes.

My quick take - Xplorie has grown local experience partnerships for years. Love the concept, but adoption can be slow. Add Alexa. Huh?

Xplorie is the 2nd largest distributor of Amazon Alexas behind Disney! Amazing, right? What's the play?

Xplorie deploys the Alexa with a screen, so it's not just voice. Guests can read text and watch videos on the screen as well. It can be used for a variety of tasks - WiFi reminders and troubleshooting, video of that tricky hot tub, get weather reports, play music, report maintenance issue, order mid-week cleans, etc.

Seems like the Alexa basics I stopped believing. But there's a new twist. Add experiences to the Alexa.

Xplorie has the local experience connections, AND they also have a call center to support those experiences. When the guest asks for the weather and realizes it's raining, Alexa can follow up with a rainy-day experience recommendation and ask if they want to book it!

This takes in-home tech AND experiences to a new level.

It's early, but they have me believing. Experience is the next frontier, and Xplorie may have a seat at the table.

Taking credit card payments is a necessity, but it is getting a bit messy. COVID opened cancelation risks, and options have been reduced. Stripe is backing away. There are a couple established options, but the industry needs more.

Updated 12/1/22: Stripe reached out to clarify their position in the vacation rental market. From Stripe's keyboard to your screen :)...

Stripe's position: "As the Short term & Vacation rental industries recover from the pandemic, the focus turns to balancing growth with a great guest experience and improved level of operational standards. Stripe is excited to play a central role in the industry, with frictionless and secure payments and financial infrastructure for guest and business-to-business payments. Stripe works with many of the leading operators from across the globe, as well as being the trusted partner to many leading technology platforms including Guesty, Avantio, Rentals United, Lodgify and more. We’re excited to offer solutions to drive direct bookings, manage third-party payments, and simplify operations across operator ecosystems, handled in a world-class secure environment."

Rental Insurance
Similar to payments, travel insurance is a necessity, but COVID exposed risks, and the options are limited. I do see some strong products out there, but my guess is we'll see more options on the horizon.

Homeowner Insurance
Similar pattern here. Few options and a lot of risk. As an industry, we need to tighten up homeowner insurance ASAP.

Insurance is a good segway to safety. Things break and people get hurt. This is part of life, and it's no different on vacation.

I'll stay off my soapbox, but I'll make two points - 1. As an industry, we can do better. 2. Follow and connect with Justin Ford to learn how you can improve safety for your guests and homeowners.

Improved focus on safety is needed because we all deserve to be safe, but there's also a big opportunity - a large, untapped market.

Are you aware government employees and contractors are not allowed to stay in vacation rentals? But government employees can ride in Uber and Lyft. What's the difference? One word - safety. The government cannot trust that safety protocols have been met in vacation rentals. There's a big incentive to get this right.

Hat tip to Anthony Gantt (Semper Fi!) with At Ease for recognizing this need and starting an OTA specifically focused on military personnel. Anthony has to provide a specific safety inspection for each property listed on At Ease!

I love book direct. But I also see value in the OTAs. I think we'll see more niche OTAs evolve. These niches may focus on previously out-of-reach guest segments - hotel and credit card points, niche apps, or military personnel.

Sometimes big gets too big - we may be approaching this tipping point with today's OTA leaders. As professional managers, you should focus on OTAs that have the best interest of the manager in mind. We experienced great examples of this difference during COVID. Listen to their words and watch their actions - they will tell you where their priorities are.

Channel Management
If you're going to have OTAs, you must manage the "channels" - IE make sure calendars sync and format data from channel to channel.

Some PMS will continue to improve their in-system channel management, but I think channel management vendors are here to stay. I don't know enough to choose a leader, but I'd suggest each option has strengths and weaknesses. Make sure your priorities align with your partners' priorities.

Share & Wholesale Inventory
COVID changed expectations across the entire industry - managers, homeowners, and guests. As the COVID travel boom draws to a close, expectations need to be reset.

The good news is we were all forced to improve by the boom. But the downward press is arriving now. As managers, you are starting to readjust your expectations as calendars remain open and rates push down. Guests' expectations are higher, and this will force us to continue to improve the execution of great experiences. The homeowners are tricky.

Homeowners became accustom to higher returns. It's always difficult to see a revenue drop and many have not planned for it. In addition, homes were bought at high prices that carry high mortgage costs, and these homes are now becoming difficult to sell.

You will need to work hard to manage these homeowner relations and expectations - give them the attention they need to feel comfortable, help them understand the market trends, and most importantly, get their units booked.

I think we'll see an increase in options to share homes from one VRM to another. Perhaps partner with a ski area if you're at the beach. Maybe partner with a local competitor you know has great marketing. Or when you book 100%, you may want to offer properties from your competitors. A couple PMS offer options for this today, and I think we'll see more of it.

What's the benefit? Get your properties booked for your homeowners. You work out a commission-split between managers, and everyone wins.

The 100 Collection which was released a couple weeks ago is a great example of this - 100 of the best professionally managed short-term rentals across the country. How many "collections" will we see moving forward? I'd put my money on more than we see today. Big shift and big opportunity.

I also see a new model coming to the industry - wholesale. Wholesale, lease arbitrage, net lease - all similar concepts, but there's a new twist that makes this enticing and sustainable.

We've seen similar ideas attempted but met with significant headwinds. IE - I'll buy your unit for $100 per night and then resell to the market for $120 per night. The problem - both sides depended on the same market, the general traveling public. COVID showed us what happens to "net lease" when a market shuts off overnight.

The new model I see centers on a large "travel club." Similar to us paying monthly/annual subscription fees for software, phones, cable, food, wine, etc., guests of the travel club pay an annual subscription fee to lock in rates and have access to vacation rental units and services. This closed group of guests is the twist that makes the wholesale option magic. The guaranteed net revenue is reliable because the club members continue to pay fees and continue to travel, all year, even when travel slows.

I only know of one, but it is very well-proven for 30 years and just released a new wholesale product to the industry - Travel Advantage Network (TAN).

I became a believer in this model when Brooke from Vintory explained that TAN was his secret weapon when he built his VRM from 0-500 (see book on Amazon).

*Editor's note: After writing the article, Adam accepted a role at TAN as the VP of Business Development & Growth.

The growth in the vacation rental industry has forever been the "long-tail" - IE small managers just starting out. Ask an industry veteran how they got started, and most will answer, "accidentally." They managed a home, and then more people asked them to manage their homes as well. I think new managers have become more deliberate with their business decision, but long-tail is still the growth of the industry.

There are a couple challenges here - 1. The industry really needs to establish quality standards, and young, small managers just starting out need to learn lessons the hard way - through experience. 2. Vacation rental management is hard, and learning through experience takes time.

Franchises offer a solution to both of these challenges. New managers can get a business plan, the tech needed to start quickly, and the support of experienced industry vets. As a result of this fast start and industry support, standards are developed quickly. In return, guests and homeowners start to trust the franchise brand, the client experience is strong from the beginning, and the new VRM grows at a faster pace.

There's an argument to be made that franchising is the future of this industry. There are only a few choices today, but they are all gaining momentum. I believe we'll see new entrants into the market over the next few years.

Management Alliances
Now is the time form alliances with other managers.

Everyone needs help with regulations. Great opportunity to share properties. Strategic alliances will help with best practices, strategy, and leadership retreats - Matt's recent Keystone Retreats is a great example.

Environmental Awareness
Hopefully, it’s not a bold statement to say we all love nature. If you don’t, take a walk in the woods this afternoon - you’ll fall in love. It should also not be a bold statement to suggest we ALL need to protect the environment.

“Climate investing” is gaining momentum fast. Here’s a recent article from Tech Crunch: Climate Investing Right Now: The Opportunity Almost Seems Unfair

Environmental awareness in travel is growing. We should be conscious of this driving force and consider ways we can accommodate the environmentally conscious traveler. Hint - your competitors may be slow to adapt!

How to protect the environment? I’m not sure anyone can answer that question other than you. Politicians would love to tell you their view, but there’s no “right” way. Do small things and share your improvements with your guests - solar, wind, reduce water usage, fix drainage, use eco-friendly cleaning products, etc.

There is one area that is catching my attention. Electric Vehicles (EV). A lot of short term rental markets are drive-to markets. EV has gained strong momentum over the last few years. I guarantee there is a segment of “EV believers” in your homeowners AND your guests. In fact, these “EV believers” will pay more to ensure their home has an EV charger.

Will we all be driving EV someday? It doesn’t matter. A portion of your clients are today. They are driving their EVs to your homes, and then sacrificing their valuable vacation time searching for charging stations. You’re not providing an exceptional experience nor gaining the added revenue.

We will see almost every manager offer an EV portion of their inventory in the next five years.

Kudos to Eric Broughton and Lino Maldonado for recognizing this need and offering OK2Charge to the STR industry.

Sell Products
Every hotel has a store these days. It is part of a great experience to have what you want when you want it. And retail creates an added revenue stream.

The vacation rental experience will begin to include in-home purchases - vending machines, product placement, amenities, souvenirs, and even home furnishings. Everything is for sale :)

Retail is great for the experience. And great for your bottom line.

Buying supplies and filling guest check-in amenity bags is time-consuming. Sojo will deliver your amenities pre-packaged. It's early, but I could see this catching on.

Monetize and/or Outsource Services
Know your strengths and weaknesses. Monetize your strengths and outsource your weaknesses. Maintenance, marketing, cleaning, laundry/linens, trash, pools, landscaping, photography/video, interior design. There's a huge opportunity to create new revenue streams and offload unwanted tasks.

Updated 12/1/22
Fractional Ownership
This is one of my fav topics! I have a lot to learn, but I LOVE the concept. I recently talked with LanceS LanceS (Lance Stitcher) of Seaside Vacations in Chincoteague, VA (not the same Seaside in the above marketing discussion), and he shared with me that Lance and Elaine are starting the process of selling their business to their employees through fractional ownership. Amazing!

They will take years to fully execute, so they stay involved in the business, and their employees/future owners have a HUGE incentive to stay focused on growing and creating amazing experiences.

This is the first time I've heard a VRM owner share this idea. I absolutely LOVE it. This is an amazing alternative to selling the business on the open market.

Quick Public Service Announcement for ALL VRM owners: You will continue to lose your best employees. The employees with the brightest futures will leave to move to the vendor side and/or start their own companies. The financial glass ceiling is very real. Unless you are on a path to ownership, there is very little room for growth at small VRMs.

Fractional ownership solves this industry dilemma.

I love it, and I hope more owners pursue this path. Kudus Lance and Elaine for your brilliant and caring foresight!

Side note: Check out Matt's Homerunners episode with Lance and Elaine. Fantastic results, per usual.

The Time is NOW

This is an amazingly exciting time to be in short-term rentals. The hottest travel sector with the most potential to improve. And you are empowered to make the improvements!

We have the opportunity to build this as we go. We need to make decisions that focus on the client experience - guests and homeowners. Build experiences that create positive emotions.

Live your hospitality passion every day. Find your limited edition voice and share it with the world.

It may seem daunting. Like sitting in a stiff airport seat waiting on a red-eye. Growth (and red-eyes) are not easy. But landing on the other side is well worth the effort.

Hop on the flight. We’ll all get there together.
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Lots to consider here. As an owner who manages my own properties, I can operate a tad more simply. My property manager actually talks to each guest before arrival. Our cleaning staff has no turnover. And (gasp) I dont want to acquire any properties to manage. Yep, I’m a heathen!
My maintenance team built/rebuilt each historic property (historic preservation is green!). Just added EV chargers through Ok2Charge.
But my not so secret sauce is that I also own historic buildings downtown with vibrant small businesses and lofts. Since I can pick and choose my tenants, I’m making good headway for my artsy community to be the Marfa of Kansas. I’m on a first name basis with most of the great folks in city hall, especially CVB. They often reach out for my advice and expertise. Now part of a 14-member committee looking to provide creative/living spaces for artists. Our town was one of four selected in the state.
Matt Landau Matt Landau may know an Inner Circle member closer to their community - if so, I’d sure like to meet this fellow radical. Doesn’t make me immune from regulations. I’m just a rabid dissident in the vacation rental community.
Now if Matt Landau Matt Landau would only invite me to a Keystone Retreat….
Really puts into view just **how much** is on the plate of each and every VRM out there in the marketplace. The amount of "zones of responsibility" that are present is staggering. Great post, Adam!
Thanks ConradO ConradO. Yeah, amazing how complicated vacation rental management is. But the reward is worth the effort. :)
Lots to consider here. As an owner who manages my own properties, I can operate a tad more simply. My property manager actually talks to each guest before arrival. Our cleaning staff has no turnover. And (gasp) I dont want to acquire any properties to manage. Yep, I’m a heathen!
My maintenance team built/rebuilt each historic property (historic preservation is green!). Just added EV chargers through Ok2Charge.
But my not so secret sauce is that I also own historic buildings downtown with vibrant small businesses and lofts. Since I can pick and choose my tenants, I’m making good headway for my artsy community to be the Marfa of Kansas. I’m on a first name basis with most of the great folks in city hall, especially CVB. They often reach out for my advice and expertise. Now part of a 14-member committee looking to provide creative/living spaces for artists. Our town was one of four selected in the state.
Matt Landau Matt Landau may know an Inner Circle member closer to their community - if so, I’d sure like to meet this fellow radical. Doesn’t make me immune from regulations. I’m just a rabid dissident in the vacation rental community.
Now if Matt Landau Matt Landau would only invite me to a Keystone Retreat….

JPrugh JPrugh - That sounds like a fantastic business model. I love lifestyle managers. We don't all need to get as big as possible - in fact, I'd suggest the majority of us should not try to get as big as possible. Run a great business, make guests happy, and share your limited edition voice. And might as well have fun while you do it. :)
FYI Fractional ownership is being outlawed in many communities for fear of becoming a version of Timeshares in the very expensive neighborhood (which in CA is just about anywhere).
A new gizmo for your list: a combo noise AND CIGARETTE/WEED SMOKE DETECTOR.
From the promo I received from them: (shared for information only)

Wynd's new Sentry device is the only sensor that can reliably protect your rooms from cigarette and marijuana smoke with >99% accuracy using our AirID™ technology. (We monitor noise, too!)

  1. ROI: When you nip noise and smoke in the bud you save on extra room cleaning and the labor associated with that as well as having to give out comps in the morning from the guest who insists they couldn't sleep because of noisy neighbors.
  2. You and your team will receive immediate notification when smoking is detected so you can mitigate the incident
  3. Graphical data eliminates the he said/she said so you can confidentially enforce smoking fees
  4. Ensure a fresh stay for the next guests and keep the 5-star reviews coming!
Launch promo pricing through Feb 30:
  • FREE Sensor and $15 $10/mo/(room or property)
  • Please contact me for bulk pricing
  • 90-day RISK-FREE pilot program to prove ROI
    Screenshot 2023-01-28 at 12.02.56 PM.png

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