2016 Technology in the Vacation Rental Industry
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Transcript of 2016 Technology in the Vacation Rental Industry
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Crystal Balling
the Industry's
Technology Glut2015 Technology Options for
Vacation Rental Managers
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Introduction
Crystal Balling the Industry’s Emerging Technologies
2015 TECHNOLOGY CONSIDERATIONS FOR VACATION RENTAL MANAGERS
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Presenters: Crystal Balling the Industry’s Emerging Technologies
Who We Are
George VolskySeaside Realty & Industry/Revenue Management Consultant.
Doug KennedyPresident, Kennedy Training Network
Tom LeddyPresident, Leddy Associates, Inc..
Amy HinoteEditor, VRM Intel &
Founding Member, The VRM Consultants.
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Emerging vacation rental technology categories
Technology Categories
Guest Apps & Activities Pricing ToolsMarketing
Property Management Systems
Call/Lead Tracking & Management
Operations & Smart Home
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ROI is important when evaluating technology purchases..
Return on Investment ($20k return / $10k cost = ROI of 2) • A vendor may advertise up to a 40x ROI• But real ROI may be 2x or zero, not 40
The vendor may mean “Spend 10K to get $400K in new sales”• But just a small percent of rent trickles down to VRMs• Too many VRM products generate no ROI
2015 P&L
Co Sales 1,000,000$
CoRev(Com & Fees): 400,000$
Expenses: 352,000$
Pre-tax profit: 48,000$
2016 P&L
Co Sales 1,400,000$
CoRev(Com & Fees): 560,000$
Expenses: 492,800$
Pre-tax profit: 67,200$
$19,200 / $10,000 = 1.92
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Technology Prices Can be Prohibitive
A vendor may charge 1% of Sales
This may not be a inexpensive as it sounds: 1% of sales (here $10,000) can equates to 21% of a VRM’s pre-tax profit
2015 P&L 2016 Price
Co Sales 1,000,000$ 10,000$
CoRev(Com & Fees): 400,000$
Expenses: 352,000$
Pre-tax profit: 48,000$ 10,000$
2016 Price as % of 2015 Profit: 21%
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Property Management Systems, Operational & Smart Home
Crystal Balling the Industry’s Emerging Technologies
2015 TECHNOLOGY CONSIDERATIONS FOR VACATION RENTAL MANAGERS
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The Early Years in the Vacation Rental Business
Property Management Systems: The Early Years
USPS
PHONE SYSTEM
BANK
FAX MACHINE
PMS/Accounting
SystemTape Chart
Reservations Board
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Chronology of Expanding Technology
Tracking $
Internal
Communications
IntegrationTracking the Money
Tracking Internal
Capabilities
Expanding Communications
Integration with Other
Systems
● Owner/Guest Details● Unit Availability and Rates● Housekeeping Scheduling
● Emails● Website
● Internet● Banking● Distribution
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What functionality should be in the PMS?
• Coming from the PMS software business, I have generally thought everything.
• This is totally unrealistic.
• In it is not in the system, it probably needs a high level of integration.
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Do You Keep Current?
• Are you aware of new features when they come out?
• Is someone on your staff taking the lead on implementing new functionality?
• Without a ‘Champion’ not much happens.
• Do you have an internal training process and/or standard operating procedures?
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Call/Lead Tracking Systems
Crystal Balling the Industry’s Emerging Technologies
2015 TECHNOLOGY CONSIDERATIONS FOR VACATION RENTAL MANAGERS
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What Are Call and Lead Tracking Systems?
In short, these systems allow for:
• Incoming calls are recorded.
• Repeat callers are identified
and records populate.
• Calls can be turned into leads
that are traced onto a “lead
stream” list for follow-up.
• All guest correspondence is
then attached to the lead.
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What Are Call and Lead Tracking Systems?
Some offer additional features:
• Integration with online chat.
• Integration with PM system so that guest details
populate automatically. Some integrate with
multiple systems; others integrate with their
company’s proprietary system.
• Provides “ACD” type call traffic reporting.
• Some allow call monitoring and scoring.
• Some offer systems and/or sales training.
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VRMA Suppliers Offering Call/Lead Tracking Systems
Survey Respondents Included:
• NAVIS Narrowcast
• Streamline Xtreme Plus Phone Force
• TRACK Pulse
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What questions should I ask?
Selecting a Call and Lead Tracking System
Do my other property management, phone and/or CRM systems
already provide some of these functions? If so, do I really need
the remaining missing functions?
Are “hybrid” semi-automated processes that can be set-up at
lower costs? If so, how much labor will it take?
If not, are manual processes an option?
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Marketing Technology
Crystal Balling the Industry’s Emerging Technologies
2015 TECHNOLOGY CONSIDERATIONS FOR VACATION RENTAL MANAGERS
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A Day in the Life of a Vacation Rental Marketer
Social MediaNew Marketing Ideas
Repeat Guest MarketingContent Marketing
Loyalty ProgramsOnline Marketing (SEO/SEM/Retargeting)
Website TechnologyEmail Marketing
Systems IntegrationMarketing Automation
Offline MarketingDistribution
Past Guest and Lead Database Management
Reviews/Online Reputation
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What’s New in Marketing Technology
Marketing Mix
Autoresponders
Channel Managers/Distribution
Guest Apps & Activities
Customer Relationship Management (CRM)
Marketing Automation
Loyalty Programs
Website Technology
2016: All about the database…
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Currently, Transactional Foundation Instead of Customer Foundation
Lead Management
CRM/Database
Reservations & Payments
Accounting System
Marketing Automation
Website
Online Marketing
Distribution Channels
Evaluation (Analytics, BI)
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We have a long way to go as an industry to get this nailed down.
CRM Database Management
New Leads
Old Leads
Guests
Owners and Prospect Owners
Guest’s Guests
CRM
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Web to Lead/Data Collection
Responsive Design
Property Display
Booking Engines
Tracking and Capturing User Behavior
Responsive, Device-Compatible Design
New Features to Display Properties
Flexible, Integrated Booking Engines
Website Technology
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Process for implementing marketing automation
Marketing Automation Set Up for VRMs
Closely Evaluate and Adapt
Determine Rules for Automated
Communications
Begin Automation
Clean and Add Existing Database
Set Up Autoresponders
Set Up Data Collection for New Leads and
Guests into CRM
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Marketing Technology
● Improve Guest Experience● Collect Data from All Guests● Communications● Upselling● Partnership Opps
Examples● Glad to Have You● Streamline● VREasy’s Guidal● LSI’s RezText
Guest Apps/Activities
● Connect with Multiple Channels● Track ROI● Control Distribution● Pricing● Smart Grouping
Examples● BookingPal● LeisureLink● Listing Bridge● Rentals United● Xotelia
Channel Managers & Distribution
● Repeat Guests● Competitive Advantage● Partner with Points Providers
Examples● VacayStay● Visual Data Systems
Loyalty Programs
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Pricing Tools and Revenue Mgt
Crystal Balling the Industry’s Emerging Technologies
2015 TECHNOLOGY CONSIDERATIONS FOR VACATION RENTAL MANAGERS
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New Pricing Tools:
A slew of new pricing aids that:
• Monitor
Occupancy rates
Advertised prices for “comps”
Market prices
Your company’s reservation data
Suppliers variously hold their products out as:
• Mere guides that help you make pricing decisions
• Automatic pricing solutions that change PMS rents
• “Yield-Management” modules that can raise rents
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Tool Types:
• Predictive systems that automatically set prices
- Using external data to make predictions
• Rules-based systems that let you set the rules to
- Increase or decrease rents at specific occupancy or dates
• Comp-set tools that summarize rents in your area
• Tools that tell you when your rates are out of sync.
Data Harvested
• Hotel rents, VRBO or Airbnb listings, events, weather, etc.
• Competitors’ websites
• VRMs own reservation history
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Product Features of Note
• Comp selection tools• Market trend information• Distribution channel pricing• Fixed Price Options
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Smart Host
Cool approach to comp selection:
• Smart host identifies comps
• You adjust by adding or deleting comps.
• Add comps by pasting an Homeaway or Airbnb ID
• Current limitation:
Focuses on Airbnb, VRBO.com
& HA
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Beyond Pricing• Works for individuals and small managers (10,000 listings already).
– Dozens of property managers including MyVRHost and OneFineStay
• Auto-price using external data to make demand predictions. Automatically tells you what price vs. rules-based systems implementing your judgment.
• Vs. comp-set tools that indicate what competitors are charging.
• Be wary of copying prices of unsophisticated competitors (why?)
• Based on external data
• Easy-to-use, requires no training (10,000 listings)
ROI Benefits:
• Saves time from manually having to run demand and comp analysis to determine prices
• Keeps calendars up to date, improving listing rank
• Free one-month trail: 1% revenues
– ($5 mil 1%= $50k) ($5 mil * 40% = $2 mil x 10% op profit)
– Cost can equate to 25% of owner’s profit.
– Paying on total revenue or bookings generated?
• “up to 40x ROI for owners [how calculate?]
Limitation: Airbnb listings, imprecise book amounts, Airbnb data
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Rented. Case Study
VRM Anna's Anna Anna's
Transaction history Rev Bid Com VRM Expenses Net Time (hrs)
2013 $ 35,000 35% $ 12,500 $ 22,750
2014 $ 27,500 $ 4,500 $ 23,000 150
"rented" facilitates contract:
Manager Bid Premises: $ 35,000 65% $ 12,000 0 $ 23,000 0
Managers Actual: $ 41,000 $ 18,000 $ 23,000
The first manager could not price below $1500 without losing money.Through rented., a second Manager (more efficient with pricing savvy) booked:
•10 peak weeks at the usual rent (as had Anna and her first manager)•10 off-peak weeks at the usual rent (more than Anna, same as first VRM)•5 additional peak weeks at a 40% discount (well above marginal cost)
The property went to the best professional. Two wins.
Summary
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Pricing Technology Challenges
• Delivering “clean” data
– Listing sites “clutter”
– Identifying “comps” (without your input)
– Flagging fee influence (add-on fees)
– Missing comps
• Factoring in advance book time (“When” renters book)
– This differs by home: Don’t drop prices too early.
• Accommodating alternative pricing “goals”
– Some tools price “to book” - leave money on the table.
– No tools can predict price-increase opportunities in most markets.
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Pricing Needs Vary by Market
We all need critical data to price well:
• How much “WILL” renters pay for a home?
• How much do they “NEED” to pay?
• What do renters consider when picking a home?
• When do specific homes book and rent?
NONE of the current products supply all this.
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Closing Thoughts on Pricing Tools
• Pricing has to begin with your reservation data. (“Core”). Market data is “Context”.
• Pricing tools may be helpful in some markets.
• They won’t be prime time for a year or two.
• Don’t rely on pricing tools to learn pricing.
• Don’t buy tools unless you don’t know more about your needs than your vendor.
– Pricing tools can be dangerous.
– It takes a year or 2 to confirm whether tools work.
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Conclusion
New technology, Internet and mobile, is “disruptive,” shifting profits and market share.
The services that dominate our budgets will be different in three years, as will VRMA’s showroom.
New products will displace legacy marketing services that have helped the industry get where it is today.
Your job is to keep is to balance cost and benefit in terms of ROI, so that you can adapt and prosper in the aftermath of disruptive change.
We hope this session is a start in that direction.