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Three Problems in the Vacation Rental Industry (and how The 100 Collection solves them)
In this article by Rebecca Lombardo, Co-Founder at The One Hundred Collection, she outlines how The 100 Collection found that vacation rental managers across the country are facing the same core set of problems regardless of size or location.
It is no secret that the vacation rental industry and its exponential growth is dealing with a fair share of problems and opportunities. Among them, there are three main themes that seem to bring the largest challenges to vacation rental companies and guests alike.
While we were excited at The 100 Collection to share our one solution that solves for many issues, we didn’t want to rush to assumptions. As one Microsoft 22-year veteran put it, we need to first agree on the problems; then decide if the problem is worth solving, and finally work together on a solution.
The 100 Collection set out to do just that. We interviewed more than 100 vacation rental managers in the U.S., and found that they were facing the same core set of problems regardless of size or location. Fittingly, the explosion of social media comments from vacation rental guests are equally unified in identifying the issues stemming from these problems.
These are the themes with overlap between the top vacation rental companies problems and the top vacation rental guests complaints:
- Brand Discovery
Here is what’s currently happening with these themes:
- Brand Discovery
Most travelers are familiar with major hotel brands, but not vacation rental company names. When they go to search online for a vacation rental, they don’t use a brand name search, making it harder for smaller companies to compete with the bigger Online Travel Agencies, or OTA companies, who are paying to be on the first page of results.
Searches for “vacation rentals” hit an all time high in June of 2020. Yet, the largest OTA companies pulled back on their Google Adwords spending. Smart people were looking for a vacation rental, while smart vacation rental companies were looking for guests. Unless a vacation rental brand has the money and savvy to get their website on the first page of Google, they may as well not exist. Likewise, if a traveler doesn’t know the brand name to search for, they might never find some of the best brands in the industry.
(Sidenote: if you Google “Best Vacation Rental Company” the results include editorial articles naming Airbnb in the top handful. The writer didn’t know or care that Airbnb does not actually manage any vacation rentals, and is not a “vacation rental company” in the way the search intended.)
Getting a lot of impressions on a Google Adwords campaign takes money and skill (or a lack of competition). Some companies, like Beachball Properties, didn’t always play that game and focused on social media instead, racking up tens of thousands of fans/followers. Yet, even on those platforms, you have to pay to reach most of your audience.
The first page of Google results are not always the best in terms of delivering a great vacation rental experience. And let’s just hope a guest isn’t doing a search for a “vacation rental” in a destination that is outside of a five hour drive radius. At that point, the results are driven by the biggest advertising budgets sponsored by companies, which are not always providing the unique and boutique experience guests are looking for.
An Online Travel Agency is a global directory of “rooms”. An OTA is a price-driven marketplace where the room and price is guaranteed, but the overall experience is not. Bookers Entering their credit card information to secure a location to stay at for a specific date are paying a lower price for a higher gamble for safety and cleanliness. These bookers know this and hold their breath accordingly.
A hotel company website is a brand-driven booking experience. Bookers are either familiar with the brand or are learning about it by exploring the website. They are likely paying a higher price to stay with a specific brand because losing precious time on their trip is not worth the gamble of saving a little extra money.
A vacation rental company website is a brand-driven booking experience as well, but these websites are hard to find if you can’t remember the company’s name (and many of their names are similar).
There is no global directory of vacation rental companies, just like there is no global database of known guests. About 23% of “rooms” on Airbnb are said to be managed by professional vacation rental companies, but their brand information is stripped out in their search results.
Long before two guys threw down an air mattress in a San Francisco apartment, generations of families in resort communities had been hosting guests from all over the world. These leaders in hospitality learned by watching their parents or management handle irate, irrational people with grace and ease, face to face. Over the decades the most experienced ones went on to lead courses, classes and masterminds at vacation rental industry conferences because they cared about the guest experience, not just the revenue.
A vacation rental company owner and their teams are in the hospitality industry. Their jobs are to service guests. They are known in Orlando as the ones who get discounts at certain bars and restaurants, because they earned it.
A person or organization that rents out a “room” they own is an investor. They get emails about mortgage rates. Their jobs might be in unrelated industries or they might manage multiple investments, but they do not typically spend their days thinking about how to meet or exceed guest expectations.
It’s not that one is bad and the other is good, it’s that the guest is largely blind to which person they are staying with if they book a room on an OTA. Likewise, the person renting out their “room” has no idea if the incoming guest has experienced a vacation rental before or is inviting a dozen of their wildest friends to join them.
Hilton actually does a really good job helping reset guest expectations in their latest commercial. If all guests come to expect a haunted house, maybe anything better than that will get five stars. Because if you don’t book with a top brand, that’s the gamble you’re taking.
Vacation rental managers typically do not fall into their roles fully aware of what they are getting themselves into. But once there, they love it and do not want to leave, despite the irate guests. This is an axiom in the industry. As one industry leader stated at an industry conference in Phoenix, “they work for the smiles and get the paycheck, not get the paycheck and work on their smiles.”
Now that more people know the benefits of staying in a vacation rental, such as having a kitchen and more privacy, the demand is expected to continue at a fairly steady rate over time, as explained by Key Data at the Data And Revenue Management conference. Guests who had a great experience in one property will want to have an equally great experience, but maybe in a different location.
Right now, the only way to find that same type of local experience is to hope that the top vacation rental brand in another state has great Google results. The only alternative is to take that gamble in a marketplace driven by availability and price.
Even within the same vacation rental company, the properties might vary widely by size, style and type. The same brand might have beach front properties available one year, but not the next. Guests looking for consistency from one brand from year-to-year should look for those identifying “Platinum Collections,” for example, within their portfolio.
There are also some vacation rental companies like Stay Duvet with a service where local coffee drinks can get delivered to the property first thing in the morning. Poconos Mountain Rentals is building homes nearly identical in features like electric car charging stations to bring repeat guests more availability and consistency. This will in turn grow their business. Others like Walker Luxury Vacation Rentals in Austin offer the same high caliber concierge services, like a Bloody Mary Bar and Breakfast Tacos, on site at all their properties.
If we can all agree that these are the problems, and we are all hearing the same complaints, and this is where the majority of overlap is taking place, the next step is to agree that these problems are worth solving.
The 100 Collection is much more than it might appear to be at the surface. By adhering to the same quality standards for the entire collection it not only makes homeowners feel like they are part of something special, something earned, but it also gives the guests exactly what they are asking for, what they are even paying extra for in some cases – experiences that meet 100% of their expectations because they are run by the top brands in hospitality.