As the vacation rental industry continues to grow, it has likewise continued to consolidate.
Here’s what the experts say you can do to remain competitive in the industry:
How homeowners and property managers can compete in a consolidating vacation rental industry
According to PhoCusWright research, only one in ten Americans have rented a vacation home. With more considering purchase, the vacation rental market is poised for enormous growth as a whole. Professional vacation rental management companies likewise have been fairly segmented to local markets with fragmented marketing strategies.
The consolidation of larger companies is coming. And they’re rapidly breaking into markets with more sophisticated technology, high budgets, and strategic national marketing techniques. Savvy investors and local managers will simply have to re-strategize for this consolidation.
Vice President of Vacation Rentals at Seaside Vacations, Scott Leggat, and industry expert George Volsky highlighted the current trends in this young, expansive industry.
With professional managers adapting to break through geographic barriers that once discouraged operations in multiple markets, management companies are quickly becoming multi-regional powerhouses due to better and more sophisticated technology.
Managing from headquarters but operating in local markets, these companies are offering homeowners more revenue with lower rates due to their ability to consolidate and gain a higher inventory of homes nationwide.
Increased efficiency and sophisticated pricing alters prices according to a range of factors including weather, time of year, and local occupancy. Investment in third party vendors have likewise lead to an uptick in acquisitions and marketing reach.
While the big dogs are getting bigger, however, George and Scott maintain that the local professionals are not finished yet.
While a larger, multi-regional company may offer sophistication and data-driven results, they can sometimes lack in service, and service is why only one in ten vacationers have not had booked a stay in a vacation home.
With travelers used to hotel amenities like concierge services, they may be less inclined to stay in a home managed by a national company that may not provide that.
The newest customers are likewise setting the standard. Looking to have “local experiences,” guests are often swayed by marketing that speaks to this. Volsky cited Airbnb’s successful marketing as proof.
To compete with large companies, Volsky predicted that smaller companies will win big with luxury homeowners due to the fact that they will be able to partner with local business to offer services like free dinners or couples massages.
These are the offerings that will win the business that the national competitors cannot.
The two likewise suggested that smaller management companies offer their lowest prices on their own websites. This is KEY when competing with third party booking sites and consolidated companies.
To conclude, simply simplify the process: Seamless transactions paired with unique experiences and service will ensure the cream rises to the top of this expansive vacation universe.
Facing the big dogs
Susan Blizzard, CEO of Blizzard Internet Marketing, highlighted an important mindset for successful property managers: They stay up to date on technology and trends but also have the ability to recognize and ultimately capitalize on the new opportunities that present themselves.
What exactly does that mean for you though?
Well, if you use HomeAway for a significant portion of your property marketing, it’ll be absolutely essential to understand things like “book it now,” “best match,” and how your conversation rates affect your placement in algorithms.
The ratio of your inquiries to bookings will continue to affect your “best match” potential, which is likely to become more and more important. If travelers are choosing a vacation rental property while booking instantly on Expedia, it makes sense that HomeAway would prioritize properties with better conversion rates.
Whether it’s working hard to scale creative ways of creating and retaining repeat guests, or maximizing the efficiency of your personal website and increasing the percentage of bookings you receive without the help of third party distribution, there are still ways that you can convert your internal effort into repeatable revenue and success.
Want to see more from the VRMA Eastern Summit? Check out our other articles from the event:
- Vacation Rental 2016 Trends & Regulations: Read More
- How Property Managers are Growing and Onboarding New Vacation Homes: Read More
- Revenue Fundamentals and Vacation Rental Fees: Read More
- The Guide to Selling Your Vacation Rental Company: Read More
Written by Mickey Kropf, Taj Akmal, Trey Monroe, Michael Goldin, Richard Kaiser, Lauren Kester, Stewart White, Paul Liguori, Justin Conway, Tanner Bruce, and Monika Haebich.