At the most recent National VRMA, Orlando, October 16-18, 2017, I coordinated a presentation on Owner Growth, Retention and Competing Against RBO with three clients, Mike Connolly (Triumph Mountain Properties in Vail CO), Kelley Cotton (Young’s SunCoast in Orange Beach, AL) and June Buttner (Killington Group in Killington VT). The topic resonated for the attendees, attested to by the fact that we had attendees stay 20 minutes after the scheduled session end.
The topic that really touched a chord with the attendees was Asset Management over Property Management. This is a topic I tried four years ago at a VRMA. It was ahead of its time. It is now more relevant. This is in direct result of portals offering more services to RBO’s including rate management, online booking, credit card processing and SEO. This makes property managers understandably nervous. Many see themselves eventually just being a check in and cleaning office if they don’t come up with a better strategy.
I’ve outlined below some ideas to creating this better strategy and I note that this is also the direction that we are going as a company. I’ll be speaking more to this in the coming months through blogs and a series of webinar and I look forward to your feedback.
- We at Barefoot have long emphasized that being the local expert is crucial for your long term survival. We have been clear in our advice about being a vacation company, not a vacation rental company. Vacationers are looking for a trusted experience, especially when traveling in a new place. National players, often only because of their size instill trust with the guest. The opportunity here is to instill trust by establishing yourself as the local expert which is something that the national companies are not as effective in doing. You will do this through marketing and blogs and generating good relevant content. But it also about extending services to your guests, opportunities for special moments and extra relaxation that makes you unique. On our side, it is why we have worked so hard on building out concierge functionality and CRM tools for guests and owners.
- Another opportunity is to understand and create a niche for your business. As industries mature, standalone property managers will need to create niche to remain relevant. Once defined, use this strategy to drive every business decision from hiring, marketing, hours, who your target owner is, and what concierge services you offer. That clear message also instills trust. This is something that effects both guests and owners and why we have always given you unlimited attributes and focused on concierge.
- The third opportunity is to create memorable moments. This was something that I focused on during my presentation at our Barefoot User Conference. It was part of our theme "The Path Forward". Do you really think that Airbnb, Expedia, HomeAway, or Priceline have the ability to create memorable moments? When you go on vacation, the memories you create are almost always the stories that are the result of personal connections. It is not the amenities of the house or the cost of the flight. This is something best done in person and locally. As a side note, this is the part of the vacation rental industry that makes day to day interactions rewarding—the remarkable opportunity to affect people’s lives (both owners and guests) every day. There are few industries that provide this opportunity.
- The final opportunity is focused on Asset Management and is strictly focused on your owner program. All of you do a form of property management. Property managers fix and repair owner units directly or indirectly when a situation comes up- you provide an immediate resolution. Why do owners buy second homes? There are many reasons but they all lead back to one thing. They believe it to be a strong investment in the future.
The stock market is another avenue to generate financial growth. Many find an asset manager to assist them in maximizing that growth. But consider that for most people, their biggest investment is their real estate. Traditional stock asset managers don’t typically touch the management of real estate.
Historically, no one really assists owners on the long-range growth of their properties/assets. For the many of you who also focus on real estate, you may disagree that when asked you are involved in asset management. But most of you would see it being a reaction, instead of a proactive activity. I would suggest that you all need to get much deeper regarding your services to owners. You need to ask the questions that asset managers ask. “What is your long-term goal?” “What is your risk level?” “What has changed since last year?” I would also suggest that you spend more time on “what do you need to make this year?” This is a number I call the Golden Number. You should look for services that are specific to owners needs. For example, real estate sales advice, insurance needs, house raising, roof repair, trash, plowing and HVAC services, tax management as well as cable, phone, electrical bill payment. Understand that most of your owners live at least 200 miles from their rental house and in most cases the asset is in a location that is susceptible to extreme situations that they themselves cannot resolve due to distance. Marketing portals are already trying to gain access to the owners based on “care”, the question is will they be able to gain the trust that you who are on the ground able to provide.
From my perspective, smart agencies will be more profitable and successful in the future if they focus on what makes them unique. Barefoot is the only solution in the industry that is designed to be tailored and consultative. We continue to listen to our client’s concerns and work with each of them to make sure you have the tools to grow and be relevant. All software systems book reservations effectively. We strive to be different, to be forward thinking and focused on your needs. I look forward to your opinions.