Changing Landscape Industry shifts affecting the dual mission - PowerPoint PPT Presentation

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

VRM INTEL MAGAZINE Inaugural Vacation Rental Women’s Summit, Ritz -Carlton, New Orleans February 19-20, 2019

Summer is in the history books. • W hat happened? • W hat did w e learn? • A nd ho w am azing is it that w e are finally s tarting to get real-tim e, integrated data in the indus try? 09

Vacation rental leading indicators (USTA and STR) E co no m y U U p p U nem plo ym ent D D o o w w n C o ns um er C o nfidence U U p p R eal E s tate M arket U U p p H o tel R evP A R (M ay + 3.3%, J un + 4.6%, J ul + 1.8 %) U U p p Internatio nal Travel D D o o w w n n D o m es tic Travel U U p p G as P rices S table ta ble V acatio n R ental A w arenes s U U p p 03

2018 Summer YOY VR Occupancy Rates: FL Panhandle/AL Gulf Coast Provided by Key Data Dashboard 80% 73% 70% 68% 66% 70% 60% 50% 43% 42% 41% 38% 40% 30% 20% 10% 0% M ay J une J uly A ugus t 60

2018 Summer VR YOY Average Daily Rates (ADR) : FL Panhandle/AL Gulf Coast Provided by Key Data Dashboard $400 $374 $350 $349 $331 $350 $300 $272 $258 $240 $237 $250 $200 $150 $100 $50 $0 M ay J une J uly A ugus t 60

2018 Summer VR YOY RevPAR: FL Panhandle/AL Gulf Coast Provided by Key Data Dashboard $300 $271 $245 $238 $250 $218 $200 $150 $110 $102 $99 $97 $100 $50 $0 M ay J une J uly A ugus t 60

2018 Summer VR YOY Booking Window (Days) : FL Panhandle/AL Gulf Coast Provided by Key Data Dashboard 100 89 87 90 81 77 80 72 70 66 70 62 60 50 40 30 20 10 0 M ay J une J uly A ugus t 60

2018 Summer VR YOY Combined Metrics: FL Panhandle/AL Gulf Coast Provided by Key Data Dashboard 15.00% 10.53% 10.00% 5.00% 2.86% 2.30% 0.00% -2.94% -2.94% -5.00% -4.11% -4.65% -4.94% -5.43% -6.06% -6.68% -6.98% -8.40% -10.00% -9.59% -11.82% -12.87% -15.00% M ay J une J uly A ugus t O ccupancy A D R R evP A R B o o king W indo w 64

US Travel Association: Travel Trend Index 07

Leading Economic Indicators for Travel (US Travel Association) 07

Vacation rental leading indicators (USTA and STR) E co no m y U U p p U nem plo ym ent D D o o w w n C o ns um er C o nfidence U U p p R eal E s tate M arket U U p p H o tel R evP A R (M ay + 3.3%, J un + 4.6%, J ul + 1.8 %) U U p p Internatio nal Travel D D o o w w n n D o m es tic Travel U U p p G as P rices S table ta ble V acatio n R ental A w arenes s U U p p 03

2018 Summer VR YOY Combined Metrics: FL Panhandle/AL Gulf Coast Provided by Key Data Dashboard M M ay ay J J un une J J uly ul A A u ugu gus s t t O ccupancy -4.65% -2.94% -4.11% 10.53% A D R -6.98 % -5.43% -6.68 % -12.8 7% R evP A R -11.8 2% -8 .40% -9.59% -2.94% B o o king W indo w 2.8 6% 2.30% -4.94% -6.06% 03

What happened? O TA G ues t F ees H igher? P o o r P ricing? M o re Invento ry? C hanging C o ns um er B ehavio r? D es tinatio n O ut o f F avo r? 02

New generation of vacation rental management Real Estate companies are structured differently. They are organized to operate two or more businesses under one corporate entity. B2C B2B e.g.,Linens & Laundry, Other Consumers Owners Services 21

Dual Mission B 2C : B us ines s to C o ns um er B 2O : B us ines s to O w ner Business Model 12

B 2C : B us ines s to C o ns um er B 2O : B us ines s to O w ner Changing O TA s B 2B lead gen & • • D ata and pricing bus ines s dev landscape • M erchandis ing C o m m unicatio ns , • • in Im m ediacy U S P , & tho ught • vacation P lanning s tage leaders hip • rental N ew face o f P ro perty care: new • • ecosystem cus to m er s ervice differentiato r 26

B2C Change #1. OTAs • O TA s pro vide acces s to gues ts w ho w o uld no t o therw is e find yo u. • E xpedia and A irbnb s till have gues t fee but are tes ting. • B o o king.co m — no gues t fee. • O verall O TA fee s tabilizing at 10-15% + channel m anagem ent fee. • 3 rd party m etas earch 37

OTAs (cont.) • G o o gle • C o nnectivity betw een s o ftw are co m panies and O TA s • O TA s s truggling to m anage gues t expectatio ns . ➢ S ubjective expectatio ns ➢ C ancellatio n po licies ➢ M erchant o f reco rd/travel ins urance is s ues /ratings 37

B2C Change #2. Pricing • P o o r pricing s trategies and fees can caus e a decreas e in bo o kings and a lack o f pro fitability. • F ees and rate parity (N et rates , co s t plus , and pas s ing o ff m arketing co s ts to o w ner) • C o ns um er trus t in pricing • F aulty co m p s ets • R eal-tim e, s o ftw are-integrated co m parative data and pricing to o ls 37

B2C Change #3 Merchandising 11

B2C Change #4. Immediacy • 5 M inute G o lden W indo w • A gents w ho res po nded to a lead w ithin 5 m inutes o f the inquiry s ubm is s io n w ere 21 tim es m o re likely to enter the s ales pro ces s than if the agent had res po nded 30 m inutes after the s ubm is s io n. • A uto res po nders are no t a replacem ent fo r inquiry res po ns e. 37

B2C Change #5. Planning Stage Inceptio n P lanning V acatio n M em o ries P M s are us ing the planning s tage o f the vacatio n to build the relatio ns hip w ith co ncierge s ervices , calls , m ailings , and s pecial s urpris es . 37

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

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

B2B sales and marketing funnel utilized by large multi-destination management companies. 14

Communication and Promoting Thought Leadership 1.Tell yo ur bus ines s s to ry 2.Identify and differentiate yo ur s ervice 3.D eterm ine U S P 4.B uild authentic tho ught leaders hip 5.U s e data, facts and authentic tes tim o nials 6.U s e the m edia and co m m unity fo rum s 33

Property Care is the New Differentiator 1. P ro fes s io nalis m 2.C o m petitive A dvantage 3.Invento ry A lerts 4.R eal es tate appreciatio n 11

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