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PM Perspectives

22 Posts tagged with the property_manager tag
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Thank you to everyone who took the time to join HomeAway in Las Vegas last month. RezFest 2013 went down in history as one of the largest vacation rental conferences on record. The nearly 900 registered attendees spent three days learning, networking and having fun together. The show was buzzing with energy, new ideas and product announcements poised to make professionally managed vacation rentals stronger than ever.

 

Across the keynotes, the software and listings lab, educational sessions, HomeAway lounge and countless one-on-one interactions over lunch, dinner, drinks, bowling and more – everyone learned from one another in a casual and professional environment. The active participation of each property manager in attendance helps drive continual growth and improvement in the vacation rental industry. View this quick video from property manager Roy Wiltshire who attended and greatly benefited from RezFest.

 

RezFest 2013 was another major step forward in demonstrating HomeAway’s commitment to helping vacation rental managers succeed.  Time and again we heard from customers about how innovative and informative the breakout sessions were as well as the demos conducted by Tom Hale (HomeAway’s Chief Product Officer) and his product team. From showcasing our newest Lead Management module to our new Housekeeping and Maintenance Mobile App and our new Reservation Grid, the words ”operational efficiency” resonated throughout the event.

 

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In addition to major software feature announcements, HomeAway CEO Brian Sharples unveiled two industry game changers:

 

  1. HomeAway’s new pay-per-booking listing model which enables property managers to advertise all or most of their inventory on HomeAway.com with no upfront fees under a pure pay-for-performance model at a 10% commission.
  2. The Professional Referral Network presents vacation home owners interested in listing on HomeAway.com with the option of enlisting the services of a vacation rental manager as an alternative to marketing and managing the home themselves. This major initiative gives vacation rental managers the ability to market their services to the millions of owners who visit HomeAway to list their properties.

 

Our sponsors provided enormous value to property managers by showcasing their products and services. Direct feedback from satisfied property managers who learned and signed up for a number of services from sponsors at the conference were rampant. And, several sponsors mentioned they sold more at RezFest in 48 hours than at all industry events combined! So, a big thanks to all sponsors for attending RezFest and delivering great value to property managers with a variety of new and innovative products and services.

 

Thanks again to everyone who made RezFest such a big success!

 

We are looking forward to an even bigger and better conference in 2014!

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Thanks to every customer and partners who took time away from their busy schedules to join us in Las Vegas in September for three days of networking, fun and tons of learning.  At its heart, RezFest is about educating our software customers on how to get the most out of their investment in our software products.  We offered over 80 sessions on a wide range of topics.  To our normal slate of stellar educational sessions we added advanced classes and a mobile app challenge to convey how important it is to develop products with input from our clients.  As always, the interactive lab was an unparalleled opportunity for customers to get face-to-face training with our experts.  Kudos to our unbelievable Support team for spending so much time preparing and presenting valuable information to our clients.


By measure of the 600+ attendees with whom we spoke at the event, combined with extremely positive post-event survey feedback, customers acknowledge RezFest as the premier technology conference in the vacation rental industry. 

 

At RezFest last year we asked the industry to “judge us by what we do,” not by speculation.  We told the industry we would develop a new tool to help them manage the explosion of leads from potential renters.  And we said we would not only develop that tool but would use it to demonstrate that we can build solutions that work with multiple platforms in our six-system portfolio.  With the demo of the lead management system (LMS), we did exactly that.  We added what is likely the biggest addition to our existing software products in years; all while constructing a new way to build our products. Without question, the LMS was one of the hot topics of RezFest!  Customers not only responded extremely well to what we demoed, but when asked what they want us to focus on going forward, the message from many of them was “do more of that.”  In other words, property managers see LMS not just as a new feature that will soon be available to them but also as a launch pad for a lot of features that will help them build stronger businesses for years to come.  Learn More about LMS here.

 

In the past nine months our product team has been hard at work making your software more effective and secure. With over 30 releases, 508 enhancements on six end systems and 1,000 defects resolved, we continue to make significant progress to deliver category-leading software to all clients. And, rest assured we have no plans to discontinue support on any of our legacy products.

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We’ve also heard property managers ask for improved integration between HomeAway Software and 3rd party distribution. Now, all of our customers can distribute inventory via their software interface on VRBO.com as well as HomeAway.com and all of our customers including EscapiaNET can participate in pay-per-subscription programs that allow them to take advantage of tiered pricing to maximize their visibility and Brand Boost to highlight their brands on our sites. Learn more about distribution here.

 

Lastly, we received feedback from HomeAway PM clients requesting to receive discounts when using both our software and the HomeAway Network of sites.  In addition to the new listing volume discounts, you can now “bundle” new listings with your annual software maintenance and support renewal and save on your annual fees. Your Relationship Manager will contact you about this opportunity prior to your annual maintenance and support renewal month.

 

Our goal for this year was to deliver on our promises to be “judged by what we do” and lay out our 2013 business strategy in order to heighten the level of trust and confidence PMs have in HomeAway’s people and vision.  We wanted to leave the “elephant in the room” behind and establish a trusting relationship with property managers to help grow this industry together!   Based on direct feedback from RezFest attendees (see testimonial videos here), the atmosphere was really positive with more and more customers appreciating that HomeAway truly is committed to helping property managers succeed in the world of online vacation rentals.  We feel our clients left Las Vegas inspired, excited and confident in choosing HomeAway as their strategic business partner not because of what we are but because of what we do.

 

Thanks,


Stephan.

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Through its ownership of listing sites and reservation software companies, HomeAway straddles a line that marked a cultural gap between professional managers and self-managing homeowners.

 

That gap is on the verge of disappearing.   This is good for managers, homeowners, renters and HomeAway—as well as the entire vacation rental industry.

 

The gap began when the Internet spawned listing sites that allowed homeowners to advertise their own vacation rental homes under the rubric “rent-by-owner” (RBO), bypassing managers. 

 

These listing sites provided resources for homeowners interested in self-management and for financially stressed homeowners struggling to cover the expenses of second home ownership. Today, they offer:

 

  • Credit cards payment options
  • Taxes collection and remittance options
  • Online bookings
  • Reservation confirmations
  • Payments tracking
  • Housekeeping or maintenance service options

 

On the other side of the gap, some professional managers wondered whether the RBO movement threatened their livelihood.  Some managers viewed RBOs as a danger to be avoided or fought.

 

Mangers and RBOs on both sides rallied to promote or protect their interests:

 

  • Some early RBO listing sites refused listings by professional managers.
  • Some self-help resources portrayed professional rental managers as cheats and unnecessary.
  • Some managers lobbied to exclude RBOs from local chambers of commerce.
  • Web site discussion groups for both groups made polarizing statements about the other.

 

The reasons for friction are easy to understand.  Technology evolution shifts money from one group to another, creating opportunities for some and problems for others. 

 

In reality, the shift occurred because Internet technology changed the way consumers shop.  This was first reflected in the popularity of online travel agents such as Expedia, Travelocity and Priceline.  Today, consumers have transformed listing sites into the most popular market places for vacation rentals.

 

Today managers needn’t worry about being displaced.  And RBOs needn’t view managers as competitors— their real competitors are other homeowners. Managers exist to serve homeowners (all homeowners are potential customers).  Today’s RBO may be in a managed rental program tomorrow.

 

Managers perform services that save homeowners from tedious and stressful tasks of dealing with customers and servicing homes.  Homeowners typically use managers when they can afford to do so, except where they make rental management their “job.” (My next blog is about the impact of rent-by-owner on professional managers).

 

Managers need not worry that renters do or do not recognize the advantages of professional managers.  Not only does this worry treat RBOs as competitors (potentially alienating future customers), but it channels energy (a scarce resource) to an unproductive end and assumes that managers’ future success depends on a public-awareness-of-rental-managers campaign that would cost tens of millions yearly.

 

Managers, while this may initially sound heretical, your success doesn’t require renters to appreciate managers or even know that a home is managed.  It is gratifying and helpful when that occurs.  But it is not critical.  Thank goodness—it means homeowners and managers are in harmony—not conflict.

 

Why?  Rating systems –which matured after RBO appeared—have emerged as an indirect champion of your brand as a professional manager.  Your systems are designed to deliver high quality, consistent service.  When that works, your homes get good reviews.

 

  • Renters increasingly rely on peer recommendations to find a reliable vacation rental.
  • Rating systems allow renters to identify which homes are well maintained and appointed.
  • Managers will always thrive where their systems generate good renter reviews.
  • Plus mainstream listing services identify managed homes as such for renters who look for this.

 

If a RBO home next to yours gets good reviews, it is usually because that homeowner is working very hard to do what you do.  That homeowner deserves to get rentals.  That same homeowner may eventually tire of working so hard, or have no time to do so, and hire you to do some or all of his work.

 

Today, there are still some RBOs and managers who distrust each other. Some RBO groups worry that:

  • The presence of managed homes on RBO sites dilutes their bookings; or that
  • Management companies have marketing and resource advantages.

 

Some rental management companies worry that:

 

  • Listing sites divert homes from rental management programs;
  • RBOs steal renters by under pricing managed homes;
  • RBOs attract renters by failing to collect (charge for) lodging taxes.

 

Many of these worries once had some basis in fact.  But today the impact appears minimal. 

 

Booking Dilution. Today, leading listing sites market managed and self-managed homes side by side.  I see no evidence that this can/should be avoided or that it dilutes or diverts bookings from one group:

 

  • It is consumers who decide the popularity of listing sites-- consumers are patronizing the sites that offer the widest range of product and price. 
  • Renters love to use the Internet to shop—they have so many options that no single company could thwart consumer shopping preferences (aggregator services today search multiple sites).
  • Renters use the Internet to find and compare all available homes—Internet shopping technology is the driver of integrated market places, not listing site policies.

 

Resource Advantages.  It is obvious that professional managers have marketing and service resources advantages—this is a common sense result where managers spread the service costs among multiple homeowners.  That’s why so many homeowners hire managers.  But hardworking RBOs compete well.

 

  • Renters simply want a well serviced home that meets their needs and is competitively priced.
  • No RBOs can be at a disadvantage if they service their home well and price competitively.
  • In my experience, renters tend to find the good homes—even where lesser homes have superior marketing exposure.
  • A manager’s pooled resources (e.g., backup cleaners) confer advantage where this results in better or more consistent service (reflected in the reviews).
  • RBOs lose rentals to professional managers and vice-versa when they are not able to provide high quality service.  Many RBOs will eventually hire managers for some or all services.

 

Tax Collection.  Interestingly, I have seen no evidence that professional managers are losing bookings to RBOs who ignore tax collection requirements, at least not in measurable dimensions.  This is due in part to local tax authorities who are ramping up tax enforcement and to efforts to educate homeowners.   Also, renters appear most concerned about finding the right home at a competitive price—it takes a lot of extra work to identify a homeowner who won’t charge tax (homeowners can’t advertise that fact).

 

  • One of the most successful professional managers on HomeAway sites tells me that his bookings are not remotely affected by RBOs who do not charge tax.  He says he is not interested in renters who take bargain hunting to this extreme and that it is his attention to inventory quality and marketing that brings him bookings and growth.

 

Underpricing.  It is true in theory that some self-managing homeowners try to offer lower rents and feel empowered to do so because they do not pay a professional manager.  But I see no evidence that self-managed homes end up with lower rents or that they divert renters from managers based on price:

 

    • Professional managers initially set rents at levels that renters are willing to pay—given all the competing homes that are being offered in the area.  They then adjust rents as necessary.
    • RBOs commonly set rents based on comparable managed homes.  Even though they don’t pay managers, most RBOs can’t afford to charge too much less rent than renters are willing to pay.
    • A percentage of RBOs do try to under price managers in an effort to attract renters.
    • This stimulates discounting by managers.  Managers track bookings pace from one year to the next and are quick to discount prices when current year bookings are slow, equalizing rents.
    • For every discounting RBO, there is a hungry homeowner demanding that his rental manager discount his rent so he can snag a renter or a manager who discounts to fill vacancies.
    • The net effect is that rental home prices adjust the way that stock prices adjust. They simply rise and fall on a weekly or daily basis in response to shifting balance between supply and demand. 

 

Stay tuned for my next blog will summarize the impact of the rent-by-owner trend on professional managers.

 

Best,
George

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GMH3330-L.jpgWe are just weeks away from hosting RezFest 2012 on September 25-27 at the beautiful Red Rock Casino and Spa in Las Vegas! The excitement is building as we prepare for this incredible event where leading property managers gather to learn, network and have fun together for a couple of days.  To make this event even more fun this year, we are launching a ”Mobile App Challenge,” which consists of gathering ideas from our clients through a 5 minute survey.  Once at RezFest, you will have an opportunity to check out the best ideas from the survey, vote on them and work with our Product Managers and Software Designers to help them build a prototype, which will be presented to you during RezFest’s closing session. Whether you attend RezFest 2012 in person or not, you can contribute your ideas through this survey and automatically qualify for a chance to win some great prizes, such as an iPad, Bose Noise Reduction Headphones or a membership to the "Wine of the Month" club.  Take our 5 minute survey before August 15th for your chance to win!

 

If there is one educational event you must attend this year, RezFest is it! At this exceptional event, you will hear from Tom Flick, whose keynote sessions have inspired companies like Ritz Carlton, Starbucks and Boeing. You can also expect HomeAway® executives to make some PM-centric announcements you want to miss!  With almost 100 sessions and 9 concurrent tracks, RezFest is your once-a-year opportunity to sit down with your software trainers for free to see demos of our latest features.  As always, you can count on our social events to have fun while learning and networking with other leading property managers. So, make sure you bring enough staff at all levels of your organization, because your biggest regret will be that you didn’t bring more employees with you to take advantage of all the learning opportunities!


See you in Las Vegas on Sept 25-27 & may the best idea win!

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As the newest member of the HomeAway Software™ marketing team, Carmela joins us with many, many years of vacation rental industry experience, making her ideally suited for her new role as our Marketing Product Manager.

 

IMG_20120614_082955.jpgCarmela started her VR industry career at First Resort™ Software as their second Support Representative.  She progressed through the ranks to become the Support Department Manager and then Vice President and Chief Operating Officer until 2004.  From there, she moved on to ResortQuest to become Director of Operations, and then VP of Information Technology.  Most recently, she served VR companies across the country as a business development consultant.  Through it all, Carmela has driven quality customer service, matched technology to client needs and discovered efficiencies while doing so.

 

Carmela grew up loving football in Arkansas (Go Razorbacks!), moved to Colorado in 1988 (Go Broncos and Buffaloes!) and recently relocated to Austin.  She has a daughter who is a college senior, two dogs, a cat, and everyone gets along great! Her hobbies include a love for tennis (because of the cute outfits), golf, hiking, all winter sports, entertaining, fresh local food, wine and flowers. Says Carmela, “Flowers just make me happy!”

 

“I am passionate about the vacation rental industry mainly because of the people who are in it—you have to be a ‘people person,’ you have to be creative, you have to be smart and you have to be passionate about delivering great customer service.  Also, I know my successes are because of the individuals with whom I have worked.  They are very talented (very lucky here too!) and I believe a team is much stronger than an individual.”

 

As Product Marketing Manager, Carmela will help identify and prioritize feature requirements on HomeAway’s® software platforms and help us communicate the great things we do on behalf of our clients.  She is amazingly bright, caring and fun, and we are thrilled to have her aboard with HomeAway Software. When you get a chance to meet her, perhaps at the RezFest® conference this year, you will find yourself putting her on your short list of super smart people who also happen to be very, very nice.

 

Welcome aboard Carmela!

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Due to the overwhelming attendee feedback from last year’s RezFest®, HomeAway Software for Professionals™ is proud to announce a repeat of the most vibrant and comprehensive software user conference for property management companies of all sizes on September 25 - 27, GMH3362-L.jpg2012 at Red Rock Casino in Las Vegas, Nevada. Join us for an incredible 2-day event where you will learn firsthand about the latest industry trends, imminent technology changes and most importantly, tangible ways to take your vacation rental business to higher levels of efficiency than you’ve ever imagined.  This year, we challenged ourselves to outperform last year’s success, which is not going to be easy after what we heard last year:

 

 

“RezFest 2011 was the best conference I have attended in 10 years,” said Doug Byron from RE/MAX Lake Travis & Co.

 

 

You won’t want to miss the most valuable industry event and miss an opportunity to spend 2 1/2 days learning and networking with the most innovative property managers in the industry while having fun at the Red Rock Casino, Resort and Spa with all of us.  This venue offers exquisite hotel rooms and suites with an unmatched combination of comfort, extravagance and value. Guests at the Red Rock Casino, Resort and Spa are pampered with every comfort and convenience imaginable, from luxurious bed linens to iPod jack sound system in every room and in-room spa treatments by appointment.

 

 

RezFest is not only a wonderful way to keep your finger on the pulse of the vacation rental industry, but also a terrific opportunity to network and interact with some of the most innovative minds in the field.” (Mark Carraway - Meyer Vacation Rentals)

 

 

In addition to over 80 educational sessions to choose from and evenings of fun-filled events, you will hear from two extraordinary keyGMH3781-L.jpgnote speakers.  Brian Sharples (CEO of HomeAway, Inc), who has lead the biggest revolution in the travel industry in decades, and Tom Flick.  Mr. Flick has provided guidance to world class companies, including Starbucks, Ritz-Carlton, Boeing, Marriott and dozens of others. His insights have inspired sales teams, executives and managers from some of the greatest companies in America—who have asked him to return year after year. HomeAway is excited to have Mr. Flick speak about teamwork, performance and growth to the greatest companies in the vacation rental industry. And as a hands-on owner and user of vacation rental properties, Mr. Flick is bound to surprise you with leadership ideas you can apply to your business immediately.

 

 

You can attend RezFest 2012 for less than $240 if you take advantage of our “early bird” pricing, a $260 saving over our rack-rate pricing!  So Register Today and receive the best possible value of any industry conference!

 


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We just launched the 2012 Breakfast Seminars in Destin, Florida and Gulf Shores, Alabama.  Both were great events and very well attended with over 50 attendees at each event.  The feedback from each seminar was universally positive.

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At the seminars, the team gave an update on our plans for all five of our HomeAway Software for Professionals™ platforms: Entech™, PropertyPlus®, FRS®, Escapia® and V12.NET®.  We reiterated our commitment to continue development and support for all of them.  We will continue to support all five software platforms well into the future as long as our clients want us to because supporting the products will continue to be a profitable business for us.  More details on our product development plans are on the way in the coming weeks, but as a public company we are not allowed to make any forward looking statements so it is a difficult balance.

 

 

Our sponsors also presented an update on very important current issues including Credit Card Security by HomeAway and VacationRentPayment, the Five New Marketing Best Practices by Visual Data Systems and Selling Value-Added Travel Services by CSA Travel Protection.

 

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But our primary message at the breakfast seminars is that it’s time to get excited!  Think about this: roughly six million Americans use vacation rentals for their vacation lodging. That’s six million out of a traveling population of over 100 million. With that as a backdrop, it leaves a huge upside for you to advance your business.  HomeAway is constantly efforting to increase the visibility of vacation rentals.  If you haven’t seen our most recent ad campaign called “Let’s Stay Together,” check it out here.

 

 

Along with increasing the visibility of the vacation rental industry through advertising, we’re continuing to develop new capabilities on our software solutions so you can take advantage of that heightened visibility.  And, we’re constantly improving our online marketing tools for professional managers.  Stay abreast of all product advancements through your Relationship Managers and a new quarterly newsletter, the first of which you will receive later this month and we hope to see you at the next Breakfast Seminar!

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As the worldwide leader in online vacation rentals, HomeAway® continues to invest in building broad-based awareness to travelers nationwide.  This year our brand team has decided to forego Super Bowl advertising and focus on a campaign promoting families and groups ‘staying together’ in a vacation rental home.

 

The new national advertising campaign, centered around the key message “Let’s Stay Together,” focuses on families and groups creating lasting memories out of where they stay, not just where they go. The HomeAway ad campaign licenses the rights to Al Green’s 1972 classic hit, “Let’s Stay Together,” and debuts in select markets during the January 15, 2012 NBC television broadcast of the 69th Annual Golden Globe Awards.

 

We believe investing in a long-term campaign with ongoing communication, rather than on a brief Super Bowl ad, will have a much bigger impact on the marketplace by bringing traveler awareness to our amazing category!  The goal with this 2012 advertising campaign, which kicks off next week is to confirm HomeAway’s commitment to building the vacation rental category as a whole and increasing traveler demand for vacation rentals.  If you’d like to learn more about the campaign, please read this blog by our co-founder and CEO Brian Sharples.

 

We invite you to join us for a webinar this Thursday, January 12, at 2pm CST.  The presentation will provide a sneak peek of our upcoming ads and discuss the overall campaign strategy to ultimately bring you more travelers.  Just click on this link to sign up and join us.

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RezFest 2011 – Wow!

Posted by s.debernede Dec 20, 2011

When HomeAway Software for Professionals™ was born in late 2010, we decided to continue the Instant Software® tradition to hold RezFest® as the premier software user conference in the industry.  In doing so, we had a simple goal in mind: to make RezFest 2011 bigger, better, more fun and more professional than ever!  Thanks to all of you showed up in Vegas for RezFest 2011, we surpassed expectations on all fronts! 

 

Now that we have rested for a couple of weeks, gathered our thoughts and received survey feedback, I can share why RezFest 2011 was so successful.  On a year-on-year analysis, conference attendance increased by 60%, with 80% more individual companies and 78% more sponsors attending than last year - thank you!  We also provided more networking opportunities.  Check out some of the fun photos from the opening night reception featuring the Blues Brothers impersonators to hitting the lanes on bowling night.  Was that fun or what? Many clients thought RezFest was the best industry event they have attended and several of them were hugging us by the end of the conference!  Here are a couple quotes from actual attendees that capture the moment:


This was our first time at RezFest and we are now making sure that event is in our budget from now on.  Worth every penny spent.”


“If you only attend one convention next year, it should be RezFest.  It is the premier event for the vacation rental manager.  You will meet wonderful people and learn so much.  At RezFest you work hard, and play just as hard.  Don't miss it!”

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With 76 track combinations, we tried to offer a diverse and interesting agenda. Presenters did an amazing job and your appreciation was reflected in your survey responses.  The large computer lab manned by the customer support team was also a tremendous success, giving clients the opportunity to be trained and/or ask questions about your particular software.  Again, based on your feedback, the software lab was regarded as a valuable addition because it provides staff members from all levels of your organization a chance to work hands on with our team of experts. The agenda was so packed with engaging material that some of you asked that we make the show a day longer next year!  Wow, that is a first where attendees ask for more time at a trade event!

 

382715_10150368458921909_6237476908_8408484_1892240781_n.jpgDuring HomeAway CEO, Brian Sharples’ keynote, he explained why HomeAway acquired Escapia® and Instant Software and addressed industry fears to demonstrate how committed HomeAway is to the PM segment.  By the end of his presentation, everyone seemed to have understood HomeAway’s strategy and felt much more comfortable with Hideaway’s acquisitions from about a year ago.  Throughout the show, clients were able to mingle and with HomeAway’s executive team. I think customers were surprised by how accessible and down-to-earth Brian Sharples, COO Brent Bellm and the other executives were in person. 

 

Peter Greenberg, the other RezFest speaker, was an energetic and informative speaker as he emphasized that the “personal contact” property managers provide to their guests 24/7 is key.  He also focused on “selling value to the right demographics,” particularly to Boomers.  Greenberg’s bullish perspective on the travel industry in the coming years was encouraging and the 2011 performance of many PMs in the room this year prove that he may be on track with his predictions.

 

I hope HomeAway demonstrated our commitment to your success and have your interests at heart.  We will continue to operate in a professional and straightforward manner, with the 120 employees in HomeAway Software for Professionals dedicated to building the best possible software solutions and keeping dialog going with you and the Support and Relationship Manager staff.  To use a construction analogy, we feel 2011 has been focused on building the foundation of a great house of the future.  Next year will be a year of INNOVATION that will add marble counter tops, state of the art light fixtures and simple details to save you time and money.  Our goal is to take your software solution to extraordinary levels of efficiencies using a modular approach that builds on top of your existing platform.  It is not an easy and it takes time but like we said in late 2010, “judge us by our actions.” 

 

Thank you for attending RezFest!  For those of you who could not attend this year, please join us next year.  You will not regret it!

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I’m excited to announce Community for Property Managers, a new online resource for professional vacation rental managers. 

 

The vacation rental management business is tough because there are many ways of going about it.  The Community for PMs will share snapshots of how successful property managers grow and streamline their respective businesses.

 

The site is launching November 10, 2011, and will be seeded with a rich sample of content.  The variety of resources will increase rapidly over the next year with your contributions to its articles and forums.

 

Sure!  All sites want great content, but few achieve this.  Why should this Community be different?  Because resources will be contributed by members of the industry itself, making up the “Community.”  Users will learn and share content via forums, share and seek advice with one another and form groups with fellow users to pool resources on a variety of topics and issues.

 

How will we foster this? Community for PMs is designed around a “give-to-get” information exchange.  Members will give opinions and advice regarding their business experience with an interest to see others’ answers.

 

Key Features of the PM Community

 

How-To-Articles.  Vacation rentals are a complex business.  The Community will offer a continuing steam of “how-to” insights on discounting, growth and other common industry challenges and trends.

 

Forums are available for managers to exchange comments.  These will grow in lock step with content and participation.  We expect to see forums for industry trends, vendor products and relevant industry news.

 

Statistics (available in 2012) will provide perspective to the booking trends experienced by individual rental managers.

 

Vendor Showroom -  I am especially proud of HomeAway here: we are planning to include a Community Vendor Showroom that will be free and open to all—including HomeAway competitors to provide PMs the ability to browse and rate products and service providers for their managed homes.   This is a bold move.  But we are hoping this will provide an incredible value to our PMs

 

I’ll host Webinars where guest speakers share insights.  One of our first webinars, “Hybrid Business Models,” will show how a rent-by-owner business morphed over five years into a PM with five hundred homes under management by incorporating best practices of both PMs and rent-by-owners.  Subsequent webinars will address difficult industry challenges in the realm of rate setting, finding growth in maturing markets and channeling employee conflict.

 

Polls will be utilized to gauge opinions on topics such as booking trends, financial effects of discounting and the impact of social media on the industry.

 

Community will also offer business support tools.  Our first example is a spreadsheet tool that will help calculate the dollar value of a single home—illustrating how much is at stake when a homeowner is added or driven away.  Soon, our “What-is-it-Worth” valuation tool will help calculate the value of a vacation rental management firm.

 

Community for PMs Will Belong to the Industry.  Community is designed to attract and benefit all segments.  No cost.  No strings.  Our goal is to build this industry and welcome any efforts towards that goal. 

 

So come on in.  See what’s there now.  Let your imagination show what you can help it become.  Then contribute what you can, take what you need and help make this a fabulous Community.

 

See you there!

 

George

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Who Should Go to RezFest?  It’s not just for HomeAway Software for Professionals (HASP) Customers.

 

I was a consultant to many property managers (PMs) during my first 12 years in the vacation rental industry.  I learned two things that are generally, but of course, not always-true:

 

  • Companies that attend industry events are the most hungry to learn and compete well;
  • The biggest benefit of industry events is the sharing of information among attendees.

 

Let me qualify this quickly, so as not to offend some very good companies that don’t do a lot of professional socializing:  there are many excellent companies that don’t attend industry events.

 

With that acknowledgment, let me further say that every management company would benefit by attending industry functions.  Why?  “THE INTERNET is changing this industry’s business models and forcing rapid industry evolution.”

 

More than at any time in the industry’s history, it is critical today that PMs keep track of changes.  No matter how strong or aggressively they monitor their own markets, they cannot afford to ignore the changes in other markets because:

 

  • Key trends start in a few markets and spread to others;
  • In my opinion, our industry’s occupancy rate (under 40%) and short peak season (often just 6 weeks) means that PMs often need more than one year lead time to adjust to trends.

 

Industry events are where PMs discover minor changes they are feeling can be the beginning of major trends that can alter the competitive pecking order.

 

The question is which industry event to attend.  Every company has limited travel budgets, and there are many industry events to choose from such as:

 

  • National associations
  • State associations
  • Local tourism bureaus
  • Reservation software user conferences
  • Regional conferences sponsored by industry vendors
  • Regional symposiums
  • Online webinars

 

So Which Events Should PM’s Attend? 

 

It comes down to:

  • Budget: what is the cost and how many events can you afford?
  • Size of the conference:  larger conferences offer more courses and more PMs to talk to;
  • Relevance of the event’s special focus (software training, housekeeping, ski tourism, etc.).

 

If you are looking to attend a larger conference, there are two worth noting…RezFest and the annual VRMA conference. Because HomeAway puts on Rezfest, we have some additional insight into the event. You can also learn more information about Rezfest here.

 

Who Will Benefit from RezFest?

 

HASP Customers.  Rezfest is organized around reservation software training and updates: it has different tracks for each of its reservation software products. So Rezfest is certainly good for HASP software customers.  Rezfest brings technicians and trainers, as well as the administrative staff who price software and decide which features to add to one location.  Rezfest is a good opportunity to get low-cost training, learn about new features, and interact with software staff who need to understand your problems and needs. 

 

Those Who Want to Explore Industry Products and Suppliers.  RezFest is one of the industry’s largest events, and accordingly, attracts the industry’s major vendors.  This is an opportunity for PMs to meet with key suppliers to compare features and prices, and talk to other managers who use these products.

 

Those Who Want Trend and Leadership Education.  By virtue of the size of HASP’s enormous customer base,  RezFest attracts one of the industry’s largest aggregations of managers and leaders.  As one of the industry’s largest supplier of reservation systems, Rezfest product and service reps deal daily with the effects of industry change across the country, and are well equipped to help PMs understand and adapt to national and regional changes.  This translates into sessions and seminar content that:

 

  • Highlight trends and issues;
  • Explain the evolving role of Internet marketing and technology;
  • Discuss the industry’s most vexing problems and solutions;
  • Offer thought leadership insights by key industry leaders.

 

Employee Rewards.  Where there is a business advantage to attending RezFest, there is also the opportunity to reward employees by sending them to Rezfest.  The event is historically held in fun locations and provides opportunities to interact with fellow PMs in a relaxed social setting.

 

Many PMs Who Are Not Already HASP Customers Can Benefit by Attending RezFest

 

  • Many will find RezFest less expensive than alternative gatherings while still offering substantial socialization, education and product information benefits:


    • Rezfest offers one of the largest gatherings of leading industry vendors;
    • The level of expertise in HomeAway’s family of products and partners is unparalleled;
    • It’s a preferred choice for those who can drive or otherwise incur less expensive travel.

 

  • RezFest is a great opportunity for PMs looking to buy or change reservation software.
    • While many managers can identify features they like in a software, most have difficulty charting the features that aren’t in a new software, until it’s too late.
    • The HASP family offers multiple reservation software products.  RezFest is the ideal location for learning which of them are best suited for a PM and, in fact, the best place to confirm that the HASP family of products will not suit your needs (if that is true).

 

For those of you interested in attending, I’ll be there.  I look forward to seeing you all.

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Though today, I shared my perspectives on the vacation rental management industry under the title “Volsky’s View.”  I’m excited to report this will be my last blog under that title.

 

Going forward, my blogs will be supplemented by contributors (HomeAway Software for Professionals (HASP) employees) who are in a position to interact with vacation rental managers and observe industry trends. These blogs, along with mine, will appear under the title, “Property Manager Perspectives.”

 

It is our goal to enrich the content of blogs on HomeAway Community by addressing evolving industry trends, newly emerging issues that concern property managers and events that help rental managers make better decisions. 

 

This change is part of a new role I will be assuming at HomeAway.  I have been given an opportunity to help HomeAway provide new and meaningful resources for property managers on HomeAway Community. The planning phase of this new project will keep me busy for a good while. 

 

We hope to unveil some new online resources and services for PMs in the future.  Until then, I’ll keep contributing blogs to PM Perspectives, as will other authors. 

 

Best,

George

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Hotels must achieve higher occupancy rates to attract investors.  It is natural that hotels sometimes fill vacancies through aggressive discounting.

 

The first part of this blog addressed community interests in vacation rentals.  This second part discusses actions managers can take to defend against hotels and cruise lines.

 

What Community Leaders Should Understand About the Unique and Critical Role Played by Vacation Rental Homes in Local Economies and Why They Should Promote a Level Playing Field

 

As noted in Part 1, vacation rentals are well equipped to survive aggressive promotional discounts by hotels and cruise lines which, by virtue of their more demanding investor expectations, must always rebound to higher prices than are charged by vacation rental homes.

 

But when municipalities place unfair regulations on vacation rentals, long-term damage can result to both the local economy and the vacation rental industry.

 

It is important to recognize (and educate community leaders on this point) that vacation rentals’ unique investment profile generates economic benefits that—on a per-visitor basis—cannot be matched or replaced by hotels.

 

Large hotels are often not financially viable (and thus not present) in vacation markets that are just beginning to attract tourists or have short seasons.  Hotels in such markets would need to charge prices that are too high to generate the high occupancy rates required by hotels.  Here:

 

  • Vacation rentals bring the capital investment (housing infrastructure) that is necessary to lure tourism dollars to destinations that lack sufficient traffic to support large hotels.
  • Vacation rentals offer lower-priced or higher-value lodging than could be offered by hotels and motels.  This brings more tourists and primes the pump for tourism growth.

 

It is also important to recognize (and educate community leaders on this point) that vacation rentals bring economic benefits to a community that goes far beyond those traditionally generated by hotels and captured within the scope of tourism metrics. Vacation rentals typically:

 

  • Involve longer stays;
  • Involve larger travel groups;
  • Employ more employees per bedroom for maintenance and housekeeping;
  • Support larger numbers of small business;
  • Accommodate peak season overflow that hotels cannot cover;
  • Generate economic benefits beyond those embedded in “tourism” metrics:
    • Prodigious numbers of housing construction;
    • Large volumes of real estate sales commissions (5-8 year home turnovers);
    • Related volumes of mortgage financing and fees;
    • Home furnishings and housewares sales;
    • Indirect employment and sales measured as economic multipliers;
    • Tax revenues related to underlying employment and sales

 

Local leaders seldom realize the full range of benefits their communities receive by nurturing and protecting vacation rentals.  As an industry, we can’t expect community leaders to understand our industry until we do.  It is our responsibility to educate ourselves, then others if we are to defend against regulations that restrain vacation rentals at the prompting of competitors.

 

What Defensive Actions Should Managers Take to Compete with Hotels and Cruise Lines?

 

My advice:  educate yourself on the forces that actually threaten vacation rentals or dictate what we can and cannot achieve.  Engage where you foresee clear benefits.  Otherwise relax.

 

Cruise lines advertise some incredible prices for all-inclusive vacations that can include air fare, a cabin, entertainment and food.  What can you do in defense?  You could pass along articles that show how much cruise lines generate from drinks and gambling, but consumers probably sense that anyway.

 

  • Cruise ships require massive capital investment, and a small decline in bookings can be disastrous.  Unlike rental managers, cruise lines have to pay for empty rooms. 
  • It’s important for cruise lines to be full even if they have to give rooms away because cruise lines get revenue from liquor sales, gambling casinos, and shopping. Plus, ports often pay a fee for each disembarking passenger.
  • Cruise passengers don’t necessarily spend less, but they love the idea that they can spend less, eat endlessly, or put vacation money into shopping, drinking and gambling.
  • Cruise lines won’t supplant vacation rentals.  There’s room for both.  I believe vacation rentals offer more of a recurring lifestyle vacation embedded in family traditions. Cruises fit in the category of infrequent travel adventures, ala Las Vegas or Disney World.
  • For 2011, economic stabilization is allowing cruise operators to demand higher prices, and this should result in less competitive pricing pressure on vacation rentals

 

Periodically, ski resorts and high-end hotels steeply discount room rates to fill vacancies. 

 

  • Resorts and high-end hotels have higher fixed costs than vacation rentals and fight to cover those costs by getting “heads in beds” that generate additional spend from spas, lift tickets, restaurants and shops. When these entities discount lodging by 50%, their revenues drop just a fraction of that and could actually increase.
  • Managers and homeowners do not generate similar supplemental spend, and are hurt more by lodging discounts.  Managers should inform homeowners about steep hotel or resort discounts and give homeowners the option to defensively discount rents to retain renters—many homeowners will  discount rather than get nothing.
  • When resorts ask homeowners and managers to discount lodging to lure renters from competing destinations, do the math and raise the issue if it appears that private homeowners contribute 90% of the discounts but resorts reap 90% of the benefit.
  • Managers need only calculate how low rents can go for them to break even.  Profit is desirable, but it is better to help homeowners get some revenue through discounted rents (even if the manager makes no profit) than to lose the homeowner (and future profits from his home) because the homeowner thinks you didn’t try hard enough

 

Remember, the ability of hotels and resorts to meet fixed expenses depends on high occupancy rates.  This dictates that hotels deliberately keep capacity below levels required for peak demand days, leaving room for vacation rentals. 

 

Also keep in mind that hotels must charge enough to generate a return on investment, whereas vacation rentals need not even cover investors’ costs of home ownership. 

 

These facts, combined, make hotels and resorts vulnerable to vacation rentals, which deliver excellent value and lower prices. 

 

In other words, vacation rentals offer a better lodging value for the renter’s buck during normal times.  Hotels and resorts inflict the biggest pain on rental managers during periods when declines in demand make it hard for hotels to cover their larger fixed expenses.  But vacation rentals will always remain healthy competitors in the lodging market.

 

For 2011, U.S. hotels appear to be on pace to grow room revenue (RevPar) 7%, and this should alleviate the steep discounting of prior years. 

 

In all events, the threat from hotels and resorts is not great over the long-term. But I'd love to hear different perspectives if you have them.

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This blog addresses questions that confront every vacation rental manager at some point: 

 

1.    “How can I compete with hotels, cruise lines and other lodging segments?”

 

2.    “How can I convince community leaders to keep the competitive playing field level?”

 

Part 1 answers the first question.  Part 2 discusses how managers should react to other lodging segments and lists reasons why community leaders should promote a level playing field.

 

Why Would a Rental Manager Want to Compete with Other Lodging Segments?

 

The obvious answer: renters of vacation homes also patronize hotels, motels, cruise ships, camp grounds, recreational vehicle rentals, houseboat rentals and B&Bs. 

 

Each lodging segment has unique advantages and core customer groups.  But many travelers patronize two or more lodging types.  Customer pools for each segment can overlap.

 

When travel declines, cruise lines and hotels unleash expensive campaigns that could divert travelers from vacation rentals. The vacation rental industry is historically fragmented and has only recently been postured to defend itself with effective national advertising campaigns.

 

Renters Have Been Inundated With Offers for Alternative Vacation Opportunities


•    Cruise packages that include lodging, transportation, meals and entertainment;

 

•    Heavily discounted rates by resorts and four-star hotels offering shops, spas and food;

 

•    Central reservation systems that discount lodging to lure travelers to resorts;

 

•    The dominance of hotels on online travel agency sites:

 

Hotels have aggressively discounted in response to several years of declining roper room revenues.

 

Should Managers Defend Against Competitive Assaults By Other Lodging Segments?

 

This question should be addressed on four levels:

 

1.    Are vacation rentals’ role in the lodging ecosystem threatened over the long-term?

 

2.    Do managers have any ability to counter low-price promotions by other segments?

 

3.    Should managers respond to promotional initiatives by other lodging segments?

 

4.    Do communities have reasons to keep the competitive playing field level?

 

Vacation Rental Homes Compete Well With Other Lodging Segments in Good Times

 

Hotels are expensive capital assets that require a return on investment from operations and thus high occupancy rates in the 60 percent range.  So developers never intentionally develop enough hotel rooms to accommodate peak season surges (just as airlines wouldn’t intentionally buy enough planes to handle the busiest traffic days if those planes would have to fly half-empty other times).

 

•    By contrast, vacation rental homes can be financially viable with low occupancy rates in the 35 percent range and can serve as the safety nets for local economies that capture dollars spent by visitors whose numbers exceed the bedroom capacity of hotels.

 

•    Investors who own the capital assets in vacation rentals (the homeowners who own your rental inventory) don’t expect to make money from lodging operations.  They expect profit when they sell appreciated real estate and negative cash flow in the interim.

 

•    This unique and advantageous investor profile for vacation rentals means that:

 

     o    Managers and homeowners may price rental homes below cost!

     o    Vacation rentals should thrive with lower occupancy rates!

     o    Vacation rentals should exist and thrive as long as property values at vacation destinations are expected to appreciate over the long term.

 

Vacation Rental Managers Make it a Point to be Structurally Equipped to Ride Out Market Downturns

Generally, when the demand for hotel rooms pulls occupancy below 60 percent for the industry as a whole, many hotels become nervous and discount room rates to any level that contributes to offset hotels’ large fixed expenses.  This is the time when they discount most and/or encourage community restrictions on vacation rentals.

 

But vacation rentals are well positioned to survive price competition, even if hotels eat first:

 

•    Homeowners, not managers, shoulder the burden when demand dips (subsidizing mortgage and expenses), whereas managers have few fixed expenses.  Managers’ largest cost is labor, a variable expense that falls almost in lockstep with bookings and arrivals.

 

     o    When rentals dry up, vacation rental managers can lay off staff and hibernate.

     o    Homeowners survive dips in demand by (a) discounting rents to maximize contribution to expenses; (b) covering declining revenue out-of-pocket; or (c) selling the home to a buyer who can afford it at prevailing annual rents.

 

•    Apart from value, vacation rental homes offer:

 

     o    Greater space for families or friends who vacation together;

     o    Kitchens that extend vacations by lowering food costs;

     o    Options for every pocketbook, from small or older homes in great locations to luxury homes with home theaters and indoor pools that are destinations in their own right.

 

•    This unique resilience of vacation rentals to market downturns means that, barring another depression, vacation rentals should exist and thrive over the long-term regardless of the level of discounting by competing lodging segments.

 

Next Blog:  Part 2: 

 

•    What Community Leaders Should Understand about the Unique and Critical Role Played by Vacation Rentals in Local Economies; and why they Should Promote a Level Playing Field

 

What defensive actions managers should take to defend against hotels and cruise lines

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If there is one debate that rages continually inside vacation rental companies, it is this:

 

In our advertised prices, should we roll any mandatory add-on fees into the rent or not?

 

Why is this a recurring concern?  Because:

•    Fees (vs. commissions) often contribute all the profit and many expenses;

•    No lodging segment has a more varied or complex pricing structure;

•    Not all managers or homeowners roll fees into the advertised prices;

•    Renters hate it when hit with unexpected fees;

•    But renters will often ignore a home that “appears” more expensive.

 

I know a company that changed its advertised rents to roll in fees but later concluded that it would have to revert to its original pricing by backing add-on fees.

 

This company’s reservations staff had been repeatedly beat up by renters who became angry when informed that the advertised price had to be significantly increased by fees (fees and taxes can increase advertised 50%, especially for short 2-3 day stays).

 

So the company changed its policy by rolling fees into the advertised rent.  The result:

•    Renters who did book were much happier;

•    The lives of this company’s reservation staff improved significantly, and

•    Bookings fell 20%.

 

The unfortunate lesson for this company was that many renters ignore a home or company that “appears” more expensive than comparable homes.  They often dismiss a home without drilling down enough to learn that it would have been less expensive than the home they ultimately booked.

 

The dilemma: renters get angry when hit with unadvertised add-on fees. But property managers lose bookings when fees are made clear due to the perception of being priced higher than properties with hidden fees.

 

If you can take the high road without losing rentals, by all means roll your fees into your advertised rents.  But remember why add-on fees are used.  Pricing today is a game of psychology.  Add-on fees are indirect ways of increasing prices. 

 

Consumers don’t always take the time to get accurate price comparisons.  This fact is obvious and relied upon in the creative strategies that focus on appearances. For example:

 

•    Car dealers add a variety of fees, including delivery;

•    Banks invent more fees than I can keep up with;

•    Airlines adapted to low cost competition by lowering base prices but charging fees for every sort of convenience.

 

Some renters—too many to be ignored—punish good managers for being honest and reward companies that do a good job of hiding actual prices until the last minute.

 

The vacation rental industry is fragmented in its pricing, so there is no common standard.

 

While commodity price can be compared on aggregation sites, I know of no site today that can accurately compare prices for vacation rental homes without a direct link to reservation systems.

 

Hotels rely heavily on fees today, as do airlines.  And the Internet does a good job of comparing prices for hotels and airlines.  But both industries typically use reservation systems that provide real-time access to availability and pricing data to travel agents.

 

In vacation rentals, the “advertised” price often does not include add-on fees.

 

Here’s my advice.  Let your market be your guide. 

•    Check the advertised prices for homes similar to yours;

•    Determine the extent to which they roll in fees;

•    Decide whether your prices “look” higher;

•    Determine whether your prices are higher and, if so adjust them.

•    Always price your homes so they “appear” to be price competitive.

 

It goes without saying that you should post all add-on fees on your website if you don’t roll them into your advertised fees.  

 

If you are dominant in your market, or have the greatest number of homes with great rental appeal, you may be able to book them even when your advertised rent is higher.

 

One question commonly arises.  “What if I go to great lengths to let consumers know that my all-inclusive prices are often less expensive than competitors’ homes that have unadvertised add-on fees?”

 

This is a fine idea if it works.  I know companies that do a very good job of this by adding language to every web page and by comparing competitors’ prices.  But if there is even one renter who doesn’t bother looking at their web sites because the advertised price appears too high, then this strategy may still result in lost rentals.

 

Sometimes, renters zero in on homes that interest them based on two lines of text and a picture.  There is a lot of basic information that competes for space in these two lines.  It is hard to make the point, “our all-inclusive price is actually a great value.”

 

In the end, your pricing strategy must take into account:

•    Your competitors' practices;

•    Your ability to distinguish your prices from competitors;

•    Your homeowner's fickleness;

•    Your staff's ability to deal with unhappy renters;

•    Your inventory and share of desirable homes.

 

 

Good luck.  There is never an easy answer.

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