From OTAs to property care, the vacation rental industry is transforming before our eyes. We look at how leading economic indicators fell apart in one market and how the new face of a dual mission business model is emerging. Professionalism is the word of the day for the new vacation rental manager.

1. Amy Hinote, Founder, VRM Intel Magazine
Changing Landscape
Industry shifts affecting the dual mission business
model for vacation rental mangers

2. Summer is
in the history
books.
• What happened?
• What did we learn?
• And how amazing is it that we are
finally starting to get real-time,
integrated data in the vacation
rental industry? 09

3. Vacation rental leading indicators (USTA and STR)
03
Economy Up
Unemployment Down
Consumer Confidence Up
Real Estate Market Up
Hotel RevPAR (May +3.3%, Jun +4.6%, Jul +1.8%) Up
International Travel Down
Domestic Travel Up
Gas Prices Stable
Vacation Rental Awareness Up

5. 2018 Summer YOY VR Occupancy Rates: FL Panhandle/AL Gulf
Coast Provided by Key Data Dashboard
43%
68%
73%
38%
41%
66%
70%
42%
0%
10%
20%
30%
40%
50%
60%
70%
80%
May June July August
60

6. 2018 Summer VR YOY Average Daily Rates (ADR) : FL Panhandle/AL Gulf Coast
Provided by Key Data Dashboard
$258
$350
$374
$272
$240
$331
$349
$237
$0
$50
$100
$150
$200
$250
$300
$350
$400
May June July August
60

7. 2018 Summer VR YOY RevPAR: FL Panhandle/AL Gulf Coast
Provided by Key Data Dashboard
$110
$238
$271
$102$97
$218
$245
$99
$0
$50
$100
$150
$200
$250
$300
May June July August
60

8. 2018 Summer VR YOY Booking Window (Days) : FL Panhandle/AL Gulf
Coast Provided by Key Data Dashboard
70
87
81
66
72
89
77
62
0
10
20
30
40
50
60
70
80
90
100
May June July August
60

9. 2018 Summer VR YOY Combined Metrics: FL Panhandle/AL Gulf Coast
Provided by Key Data Dashboard
64
-4.65%
-2.94%
-4.11%
10.53%
-6.98%
-5.43%
-6.68%
-12.87%
-11.82%
-8.40%
-9.59%
-2.94%
2.86%
2.30%
-4.94%
-6.06%
-15.00%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
May June July August
Occupancy ADR RevPAR Booking Window

10. US Travel Association: Travel Trend Index
07

11. Leading Economic Indicators for Travel (US Travel Association)
07

12. Vacation rental leading indicators (USTA and STR)
03
Economy Up
Unemployment Down
Consumer Confidence Up
Real Estate Market Up
Hotel RevPAR (May +3.3%, Jun +4.6%, Jul +1.8%) Up
International Travel Down
Domestic Travel Up
Gas Prices Stable
Vacation Rental Awareness Up

13. 2018 Summer VR YOY Combined Metrics: FL Panhandle/AL Gulf Coast
Provided by Key Data Dashboard
03
May June July August
Occupancy -4.65% -2.94% -4.11% 10.53%
ADR -6.98% -5.43% -6.68% -12.87%
RevPAR -11.82% -8.40% -9.59% -2.94%
Booking Window 2.86% 2.30% -4.94% -6.06%

14. With all leading indicators favoring
the industry, what happened?
OTA Guest Fees Higher?
Poor Pricing?
More Inventory?
Changing Consumer Behavior?
Destination Out of Favor?
02

15. New generation of
vacation rental
management
companies are
structured differently
to allocate focus and
resources to multiple
business segments.
21
B2C
Consumers
B2B
Owners
Real Estate
e.g.,Linens & Laundry,
Other Services

16. Dual
Mission
Business
Model
12
B2C: Business to Consumer B2O: Business to Owner

17. Changing
landscape
in vacation
rental
ecosystem
26
• OTAs
• Data and pricing
• Merchandising
• Immediacy
• Planning stage
• New face of customer
service
• B2B lead gen &
business development
• Communications, USP,
& thought leadership
• Property care: new
differentiator
B2C: Business to Consumer B2O: Business to Owner

18. 37
B2C Change #1. OTAs
•OTAs provide access to guests who
would not otherwise find you.
•Expedia and Airbnb still have guest fee
but are testing.
•Booking.com—no guest fee.
•Overall OTA fee stabilizing at 10-15% +
channel management fee.
•3rd party metasearch

19. OTAs (cont.)
•Google
•Connectivity between software
companies and OTAs
•OTAs struggling to manage
guest expectations.
➢ Subjective expectations
➢ Cancellation policies
➢ Merchant of record/travel
insurance issues/ratings 37

20. B2C Change #2. Pricing
• Poor pricing strategies and fees can
cause a decrease in bookings and a
lack of profitability.
• Fees and rate parity (Net rates, cost
plus, and passing off marketing costs
to owner)
• Consumer trust in pricing
• Faulty comp sets
• Real-time, software-integrated
37

21. B2C Change #3
Merchandising
11

22. B2C Change #4. Immediacy
• 5 Minute Golden Window
• Agents who responded to a lead
within 5 minutes of the inquiry
submission were 21x more likely
to enter the sales process than if
the agent had responded 30
minutes after the submission.
• Autoresponders are not a
replacement for inquiry response.
37

23. B2C Change #5. Planning Stage
PMs are using the planning stage of the vacation to build the relationship with
concierge services, calls, mailings, and special surprises.
37
Inception Vacation Memories

24. Example, Inspectors are being replaced with STAGERS.
Inspectors judge past housekeeping performance.
STAGERS make sure all is perfect for incoming guests.
B2C Change #6. Customer
service looks a little different.
Housekeeping and maintenance
teams are the new face of the
company.
42

25. Dual Mission: B2O
Built like the B2B
Business Model
• Sales and Marketing
• CRM
• Benchmarks and quotas
• Customer Feedback
• Communication
• Product Definition and
Differentiation
• Customer Support
10

26. Professionalization of the B2O sales and marketing funnel
14

27. 1. Identify and differentiate your service
2. Determine USP
3. Tell your business story
4. Build authentic thought leadership
5. Use data, facts and authentic testimonials
6. Execute B2B-style communications plan
7. Use the media and community forums
Communication and Promoting
Thought Leadership
33

28. Property Care is
the New
Differentiator
11
1. Professionalism
2. Competitive Advantage
3. Inventory Alerts
4. Real estate appreciation

29. Inaugural Vacation Rental Women’s Summit, Ritz-Carlton, New Orleans
February 19-20, 2019

30. Amy Hinote, Founder, VRM Intel Magazine
Changing Landscape
Industry shifts affecting the dual mission business
model for vacation rental mangers