Why aren’t you going to the HomeAway Summit this year? 

For those who are still undecided or are thinking of not going to the Summit, you are missing out on a great opportunity to improve your ROI.  The information, new ideas, connections and resources you gain at a Summit lead to reduced costs, increased sales and streamlined operations, all positive contributions to the bottom line.

We Saved Hundreds!  At last year’s summit we met the guys from Vacation Rent Payment, and after moving our credit card processing over to them we reduced our discount fees by more than 10% in 2012, saving us hundreds of dollars that went straight to our bottom line.  We will continue to realize those savings going forward (as long as we take credit cards) resulting in a direct increase to our bottom line revenue each year with no further action required on our part.  Smells like a winner to me. 

Even if that were the only benefit we’ve had from attending a summit we would say it’s worth it, but there have been so many more. 

Benefits Of Attending the Summit

Networking with other home owners – it’s tremendously valuable to converse with other vacation home owners and the Summit is the best place to do it.  You’ll meet people from all over the world who are eager to share what’s working for them in their business and to hear about what is working for you in yours. 

HomeAway gives you insider treatment – attendees are often invited to participate in beta trials for new products that HomeAway and other industry affiliates are creating to help us be more successful.  You get the opportunity to provide feedback and shape the finished product, plus you get access to it sooner and sometimes cheaper than the rest of the world.

Meet HomeAway leaders and influencers – The people who are growing our industry every day are all in attendance and highly accessible.  The question & answer sessions are very informative and provide a forum for us to praise, vent, question and learn.

5 Ways to Get the Most Out of Your Summit Trip

1. Go into the summit with the mindset that you are on a treasure hunt for information that will be valuable to you and your business.  This is a great opportunity to set aside time to improve your business, so make the most of it because it may be the only time you do it this year.  
2. Make a list of the questions and topics you are interested in ahead of time.  If you attend with a purpose you are more likely to get what you want from the Summit.
3. Along the way find the people in HomeAway shirts and network. These people have great knowledge and can link you with the department heads and project leads that can move your business forward. 
4. Make it a point to meet and greet everyone you make eye contact with.  “So where is your home?” is the easiest ice breaker there can be.  At minimum, you will learn about a new area of the world, at best you will learn a best practice or two and maybe even work a trade for a stay in a vacation home.  Bonus! Best Practice:  Make it easy to pass your information along.  Take some business cards, even if you have to print them at home.
5. Take notes.  It worked in school and it will work in business.  Write down those epiphanies that are bound to happen as you attend sessions, talk with people and ponder your business.

The Bottom Line:  The HomeAway Summit can only make your vacation home business better.  You will hear great ideas from other home owners, you will get sneak peeks into what HomeAway is doing to drive our businesses, and it gives you the chance to tell someone at HomeAway about your idea (or beef) and actually have a chance to get something done about it, or at least understand why it is the way it is.

Between the ideas you will gain to cut costs and drive revenue and the write-off on your taxes (you are your accountant) it will be a great way to increase your ROI over the next year.  It will be time and money well spent. 

Here’s to HomeAway for bringing us all together for the good of our businesses!

Cheers!

Michael

Sign up for HomeAway Summit here: http://www.homeawaysummit.com

Angela and I have turned away five potential bookings for upcoming open nights in just the past 30 days!  Prom season is upon us and there is a growing trend among frothy high school seniors to convince their parents that a post-prom party at a “rented home” is a great idea.

We’d rather be vacant.

We’ve been blessed with more than 500 bookings, this blog is about the dozen or so we would rather have said “Thanks But No Thanks” to.  For us, local social gatherings are one of several types of bookings which we have learned can easily lead to lost revenue due to:

• Unnecessary damage to our home
• Interruptions for the subsequent guests
• Disputes with the offending group
• Upset neighbors
• Negative reviews

To protect ourselves against money flying out the (broken) window we have established a profile, for our business, of groups that we usually would rather not do business with. 

• Bachelor/bachelorette parties, post wedding parties (police helicopter!)
• Young adults without proper supervision
• Bookings with pets (READ VR Dilemma: Pet Friendly or Pet Free?)
• Groups staying less than 3 nights
• Groups not inclusive of the person who has signed our rental agreement

Ultimately the list above equates to LOST revenue.  Broken windows, broken glass in the pool, stolen items, damaged furniture, scratched floors and police helicopters…oh my!  With only four hours between bookings, we don’t have the time to scramble while trying to resolve an unforeseen issue; vacation home owners get enough of those anyway.

There are three primary methods we use for screening our potential guests:

1. Ask Them.  Seems obvious enough, right?  I’m amazed at how many owners I talk with who say they employ little to no screening for their inquiries.  We try to speak live with each person who books with us so we can ask them about their trip.  In addition to finding out why they are renting we often can provide great insight into how they can make the most of their stay.  Recall Delightful Memories?


2. Google Them.  I spoke with an owner at this years’ HomeAway Summit who runs a criminal background on every guest.  While that may be extreme, the idea of doing a little diligence on the person/group booking your home is a good one.  Google makes it easy, and sometimes you uncover that your guests may have something very interesting in common with you.


3. Get a Reference.  When considering large groups, like a traveling youth sports team, we will politely ask whether or not they have stayed in    vacation homes before and if they would be able to provide a reference.  If they hesitate, that is a red flag to us.

CASE STUDY -The Hawaiian High School Basketball Team:  Three years ago we received a call from a high school basketball coach looking to rent our home for his group of teenage boys.  Stopping just short of “Thanks but no thanks” we asked for a reference, to which he provided three.  After speaking with two of them, we said we’d only be comfortable with a larger security deposit.  He obliged.

We set clear expectations of how our home should be treated while asking if there was anything special they would need for their group.  He asked for a large rice cooker.  We obliged.

THE RESULT:  Their stay was fantastic, no trouble whatsoever.  He has rented from us three more times for a total of six weeks and they are model guests.  We no longer require any cash deposit (just the cc# in our agreement) and it’s a giant “Love fest” between us with gifts and thanks flowing freely both ways.

So there can be exceptions, but you need a baseline by which to make those exceptions.  The beauty of creating a profile of groups you don’t want is that it gives you a means by which you can also make exceptions. 

The Bottom Line:  Not every booking is good for our business.  And what’s good for our business may not be good for yours, each home is unique.  Develop criteria to identify which bookings are not right for your business and say “Thanks But No Thanks!” to those inquiries unless you can somehow reduce your exposure to the risk those bookings present.

Resisting the temptation to book a reservation that doesn’t fit your guest profile will result in a lower average cost for turns, fewer headaches and a higher quality experience for the guests you do want. 

Here’s to great guests, risky guests and the discernment to recognize the difference.

Cheers!

Michael

There are many ways to measure the success of a vacation home rental business.  How do you measure yours?  Are you hitting the goals you’ve set for yourself?  Or more importantly, do you even have goals for your vacation rental business beyond “to cover our mortgage” or “make a profit?”

In this blog we’re going to look at a few different ways to set goals for your vacation rental business in order to track your success.  Some of them can be tied directly to your profits and losses, while others may not directly impact your bottom line, but are good indicators for success, nonetheless. 

To start off, it’s a good idea for any business owner to establish goals.  As a general practice, I like to use the old business adage that every goal should be S.M.A.R.T.  (For more information on S.M.A.R.T. goals visit http://en.wikipedia.org/wiki/SMART_criteria)

For example, let’s suppose one of our goals is to increase our revenue from $65,000 to $77,000 the following year.  Here’s how we make it S.M.A.R.T.:

• S – Specific:  Increase revenue by $12,000 to $77,000 in the calendar year 2011.
• M – Measurable:  If our annual revenue reaches $77,000 at year end, we will have been successful.
• A – Ambitious:  The goal represents your very best effort or maximum output. 
• R – Realistic:  Considering vacancy rates (in this case) a $1,000/month increase in revenue is achievable.
• T – Time Bound:  We are using the 2011 calendar year as our time constraint.

Other examples of S.M.A.R.T goals may be that your vacation home does not sit vacant more than 5 nights in any calendar month, or that your non-rental revenue in the year 2012 exceeds $5,000.

This may seem like a simple exercise but you’d be surprised how easy it is to set a goal that doesn’t line up with the S.M.A.R.T. principles.  Using this approach to set appropriate goals for your vacation rental business will help ensure your goals are driving your business towards increased profits.

Equally as important as the goals you set are the metrics you employ to track your progress. Many businesses refer to their primary metrics as Key Performance Indicators, or KPI’s.  My wife, Angela, and I established our KPI’s early on in our vacation rental business and have stuck with them ever since. 

We set our goals using the following KPI’s:

• Rental Revenue – includes regular nightly revenue and fees for additional guests
• Non-Rental Revenue – includes cleaning and pool heating fees, underwater camera and video game console rentals, and commissions from attraction ticket sales
• Booked/Occupied Nights– the total number of nights in a year our home is occupied  including:    
  • Personal Use – nights we stay in the home for our own use
  • Donations – nights we are able to give away with little or no revenue in return
  • iTravex Exchange – nights we’ve taken in trade using iTravex.com 
• Vacant Nights  – missed opportunities during the year when our home has sat empty

We have kept track of these KPI’s by month and by house for more than four years.  The historical data has proven to be invaluable to us in terms of understanding and managing our business while maximizing our ROI. 

I spend 30-45 minutes each month putting the KPI information we gather into a simple Microsoft Excel spreadsheet that allows us to monitor the progress of our business over time.  If you have not been tracking this information, I recommend taking the time to go through past bookings to compile whatever data you can to give yourself a benchmark. Then going forward you’d only need to maintain the spreadsheet moving forward.  To me, this is definitely time well spent. 

With this information readily available, you can make more informed decisions on:

• Which reservations to take when check-in and check-out dates conflict
• Which bookings to discount
• When to run special offers or featured listings
• When to take trades
• Which nights are available for donations

Donations have become an increasingly more important KPI for us in our vacation home rental business.  In our next blog we will explore several ways to grow your vacation home business, (and your heart) by donating time in your vacation home. 

The Bottom Line:  Proper goal setting and tracking of KPI’s is an integral part of maximizing the ROI of any business.  A business running without goals or established metrics to track the progress towards attaining those goals is analogous to a ship at sea without a rudder or a compass.  The time you spend setting goals and tracking your progress will help you run your business more efficiently and profitably while paying dividends in the long run.

If you have success stories related to goals you’ve set for your business please share them in a comment below.  Until then, here’s to knowing where we’re headed and how we’re going to get there! 

Cheers!

Michael