There’s more opportunity than ever in the fast-growing vacation rental business, but staying competitive now takes much more than providing a great property — owners and managers must continually upgrade everything from their technology to their guest experience.
As vacation rentals expand into a bigger industry, property owners and managers might see a glass half full or half empty. On the plus side, “Awareness is at an all-time high,” says Mike Copps, executive director of the Vacation Rental Management Association. But growth also brings complexity.
Changing times have presented some challenges that are testing the savvy of property owners and managers: greater technological sophistication in this space, ever-rising traveler expectations (especially among Millennials), and stiffer competition, thanks to industry consolidation and more second-home owners getting into the business.
To build an enduring business — one that can adapt and thrive as the industry evolves — here are three points for owners and managers to consider:
1. Get digitally up-to-date and be where the customer wants to shop: As this series has noted, the gap between those businesses resisting modern technology and the ones embracing cutting-edge business models is widening. Adopting software that automates the process of managing multiple listings across distribution sites maximizes visibility to the consumer and frees up many hours of labor a week. These distribution solutions, in tandem with price optimization tools, help owners and managers keep rooms filled at the best price.
Maintaining a fast and well-designed website where guests can book directly is also imperative. “I’m seeing so many websites that are broken,” says Susan Blizzard, owner of vacation rental-focused Blizzard Internet Marketing. This includes functionality on mobile devices; for instance, a pop-up window won’t work properly on an iPhone, she notes. Another common issue: “Pictures are pivotal, but a lot of people aren’t doing them properly,” weighing down websites with huge image files that are “slow as molasses” to load.
2. Limit friction points for guests: Property owners and managers must retool the guest journey for today’s more demanding, less patient traveler. The Millennial guest especially expects transparency, efficiency and convenience — from accessing extensive property information to booking instantly online to a seamless check-in.
Jeremy Grogg says his company, Kees Vacation Rentals, has developed a software system that lets guests report problems electronically, since travelers dislike calling in issues. Kees has also invested in a concierge program that enables customers to grocery-shop online two days before their check-in date, then find the supplies in the fridge upon arrival. HomeAway’s mobile app now integrates with both Uber and grocery-delivery service Instacart.
3. Hyper-focus on guest needs and wants: With travelers seeking truly memorable experiences, earning repeat business and referrals gets more challenging. The solution starts with better understanding the customer, says John Dalton, chief marketing strategist for the Onsite Property Management Association. Since “most companies know more about their competition than their guest,” a report card or customer survey should focus not on “tell us about us” (e.g., did we address any problems promptly?) but rather “tell us about you.” This can help owners and managers differentiate — “There’s an awful lot of sameness out there now,” says Dalton — and avoids commodification. “If you’re going to go on price, you don’t get customer loyalty — you teach them how to shop and be competitive,” he says.Properties can also differentiate by catering to very specific guest needs — for instance, targeting pet lovers, surfers or golfers, like the Oster Golf Houses, built around a golf trail in Alabama.
As the vacation rental industry gets shaken up by massive change, adopting new businesses models, practices and tools is increasingly essential to survival.