Jeremy Gall discusses challenges and opportunities: where is vacation rental management headed?

Jeremy Gall discusses challenges and opportunities: where is vacation rental management headed?

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OWhen we launched Breezeway in 2016, few companies in the vacation rental ecosystem were talking about property maintenance and operation. Managers were focused on maximizing bookings and acquiring owners as they were rightly driven by the rapid growth of the industry. “Real estate transactions” was not a well-known concept, which became clear to us during our conversations at industry conferences.

The growth of the short-term rental category over the past five years is well documented, not only in terms of the number of houses for rent and management companies, but also the identity of the operator and the weaknesses and the priorities that go with them. The pandemic has accelerated the importance of real estate operations (now a ubiquitous term and a separate category within the business), changing processes and restructuring the day-to-day of most vacation rental professionals.

This was the impetus to host ELEVATE, the first-ever industry conference dedicated to property readiness that Breezeway hosted in March. Our mission for the summit was to strengthen dialogue on operations, so we brought together a variety of leading voices under one roof – from voices of local housekeeping supervisors to leaders of multinational brands. Some 800 registrants listened to these experts share their insights and experiences on many topics, including rental supply convergence, new technology trends, and managing more work and less time doing it.

In this article, I share my perspective on where vacation rentals are headed. I’ll discuss how current expectations from customers, owners, and regulators are creating new challenges and opportunities for professional managers, and why managing the demands of every person is critical to the future of the industry.

Expectations for industry growth

Short-term rentals are no longer seen as “alternative accommodation”. Instead, they are a preferred accommodation category. The industry has been growing towards this state for decades, and now travelers are embracing it. According to Key Data, bookings per rental have more than doubled since 2019, and occupancy rates in vacation rental-dominated markets like the Outer Banks and Cape Cod have increased by more than 20%.

While attributes such as more privacy, ample space and family-friendly amenities have positioned vacation rentals well amid the pandemic, the expectation of high quality will be key to the continued growth of the business. ‘industry. “As companies build their brands and become known for more quality, we will reach new markets,” said Merliee Karr, founder and CEO of UnderTheDoormat. “There are new customers coming into our market, and whether we like it or not, we’re going to be competing with hotels. Eleven percent of consumers are more likely to book a short-term rental as a result of COVID than they were going. This is our opportunity.

For consumers, it’s all about the experience

Travelers continue to demand more personalized and upscale vacation rental experiences. The lingering sensitivity to safety and cleanliness is steering consumers toward rentals that deliver professionalism, a sentiment that 71% of operators say will stick around indefinitely, according to Breezeway’s 2021 Operations Survey. At the same time, millennials and younger generations are expected to make up 75% of travelers by 2025, a consumer cohort that Airbnb reportmaintains higher standards of service and convenience.

Operators are taking this ‘experience first’ approach for their customers, from booking to payment, in an innovative way that has a much more ‘hospitality’ feel.

ALTIDO, for example, has introduced new services to provide a more predictable, concierge-like experience. “We have started offering clients a virtual tour of the property with a walk-in experience that gives them a good indication of the look and feel of the property,” said London operations manager Anthony Lee. . “Expectations are higher than ever, and it’s all about convenience and experience. We offer pre-check as well as grocery delivery so the fridge is stocked on arrival.

The challenge extends beyond the preparation of the property and does not end after the client checks into the property. Expectations for in-stay experiences such as mid-stay cleaning, late check-out, and surrounding amenities and recommendations have driven managers to increase both the scope and depth of their work. Targeted communication has become a fundamental tenet of the job, a necessary way to facilitate VIP guest experiences so they can fully enjoy the property.

For Ashley Kubiszyn, CEO of River Ridge Rentals, the key to resolving issues and providing timely service is linking real estate operations and customer communication programs: “As soon as our team is on the road [to fix the issue], we mark the task as in progress and the guest receives this update. Then we close the loop with a text “it’s over”, because it’s very important. »

“Managing up to” customer owners

There are competing macroeconomic factors that have altered the supply and demand for property management services. First, the low interest rate environment has catalyzed second home purchases, increasing the number of vacation rentals available to managers. But the number of landlords interested in management services has stabilized as the software ecosystem offers platforms and tools that have lowered the barrier to self-management, and increased the variance in the quality of rentals. holidays. The rules of the game for marketing have also leveled off, leading to higher acquisition costs.

Simply put, landlord relationships—both fostering existing relationships for better retention and effectively acquiring inventory—remain a challenge for vacation rental managers. Owners expect more visibility into how their assets are (and will be) managed. Companies such as Berkshire Hathaway Homeservices in Vail, Colorado address this challenge from the start by pitching their process to potential customers. “When I meet new owners, I put the technology first and show them our operating platform,” says Vice President and General Manager Jon Eskin. “More than anything, owners want to see how you run your operations, so we show them how we do the inspections, and they love it.”

Careful attention and communication with owners shouldn’t be a one-time thing. Providing constant visibility into asset management programs leads to healthier relationships with owners which, in turn, leads to better retention, glowing testimonials, and word-of-mouth referrals. Every owner and property is unique, and many professional managers tailor their method and frequency of communication to each owner’s personality and preferences. This creates a heavier operational burden, but the coming years should prove that managers are up to the task of monetizing more services and delivering more customer value.

Embracing real estate services is a huge growth opportunity for managers, but it can be a double-edged sword as it forces operators to deal with more work and less time. The intersection between real estate operations and landlord relations may well be the key to unleashing internal efficiencies and controlling the narrative with landlord clients.

“We use technology to update owner liaisons whenever there is a maintenance issue, and within minutes we can notify the owner and deal with it internally,” Eskin said.

Taking care of a rental is one thing, but without communication, landlords won’t know the full value you provide. Sharing property data and service interactions with owners will help showcase your professionalism and assure your clients that their home is in good hands.

What about the regulations?

The growth of vacation rentals has caught the attention of city policymakers, increasing scrutiny and restrictive policies. But, according to Philip Minardi, head of public affairs at Expedia, the pandemic has changed the regulatory trend. Last year highlighted the economic value that vacation rentals bring to the table, creating a unique opportunity for operators and cities to continue the conversation about fair and effective policies.

“Consumer demand drives the dialogue forward, and the industry recognizes the importance of doing our best, being proactive, and engaging in these discussions before they turn vitriolic,” Minardi said.

As an industry, we must come together to promote responsible hosting practices and minimize disruption within our communities. A clear and cost-effective way to achieve this goal is to use the best technologies that provide travelers with more predictable and higher quality experiences. If the recovery continues to unify regulators and operators, regulation should not hinder growth, but rather elevate the professionalism of the entire industry.