As the vacation rental industry grows up, the gap between those players embracing modern ways of operating and the rest is widening. Given the high expectations of today’s travelers and the leg up provided by digital tools, this divide will widen and the savvier operators will quickly dominate.
The vacation rental industry has been seen as one of the last uncultivated frontiers for online travel. Consider that as recently as 2012, with many travelers long accustomed to Internet booking, three-quarters of vacation rentals were still not transactable online.
“We look at the vacation rental world as an experience that just hasn’t been modernized as well as it can,” Airbnb’s global head of vacation rentals, Shaun Stewart, told The Australian last year.
As the sector matures and as the lines blur between traditional categories of lodging, modernization by way of technology is becoming essential to keeping up with peers and the wider hospitality industry. Meanwhile, travelers increasingly expect frictionless experiences, instant answers and extensive information at their fingertips (for instance, floor plans and images of the precise unit they’re booking).
“Guests are demanding more professionalism than people were able to get away with before,” says Andrew McConnell, CEO and founder of Rented.com, a wholesale marketplace for property managers. “The people who dominated VRBO in the mid- to late ’90s and are used to spending days emailing back and forth [to confirm bookings with guests] are finding it incredibly difficult to make that transition.”
“It’s amazing how many property managers don’t even have a custom email address — they’re sending out bulk emails from Gmail,” says Matt Landau, owner of a vacation rental business in Panama. Some owners and managers require guests to call to determine availability, he says, or they write every email from scratch rather than use the automated responders built into third-party software. Landau shares best practices with subscribers to the Inner Circle section of his Vacation Rental Marketing Blog.
Price optimization is also relatively new to the industry. Not long ago, says McConnell, “even professionals in the space had a peak-week rate, and it was ‘Set it and forget it.’ And then you had all these people who came from airlines and hotels who understood dynamic pricing.”
Many smaller vacation rental owners and property managers lack formal hospitality training, let alone digital expertise. But, notes Mike Copps, executive director of the Vacation Rental Management Association, “The number of companies out there who can help accelerate that digital sophistication in a rapid manner is growing regularly.” This proliferation of partnerships and new tools “are helping this sector catch up with the rest of the industry very quickly.” The breadth of vendors exhibiting at the VRMA’s recent Eastern Seminar gives an idea of the numerous services available.
Technology has been revolutionizing the industry at a multitude of touchpoints, as outlined in a Skift report on the vacation rental technology ecosystem. Third parties are offering listing management— enabling owners to update availability, rates and property descriptions across distribution channels from one dashboard — as well as price optimization and data mining tools. Smart home technology like Bluetooth locks and Nest thermostats is also important, enabling owners and managers to do more from afar. Listing with online distributors can open up access to tools like mobile booking and advanced search optimization.
“Many people aren’t against [new technology], they don’t understand what it does,” says Landau. Vacation rental owners and managers are more focused on their passion, which is hosting guests on their properties, than on getting digitally up to date. Ultimately, “If they want to keep doing business as they have been, that’s fine. If they want to get serious and make a business that lasts, then you need to bolt on the right framework.”
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