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It’s no secret that Professional Vacation Rental Management companies (VRMs) have been competing against Online Travel Agencies (OTAs, i.e., VRBO.com, HomeAway, Expedia, and AirBnB) that have successfully marketed to homeowners who advertise their accommodations alongside those of professional management companies. However, changes in regulations for short-term rentals, higher guest expectations, higher marketing costs, insurance requirements, and an increasing time commitment to self-manage a vacation rental is opening the eyes of many homeowners who are finding it more and more difficult to keep up. Property Managers that are adapting to the ever-changing vacation rental industry landscape may be the best choice for renting your home.
The scheduling of housekeeping and maintenance services, demands of 24/7 customer service, marketing and advertising, bookkeeping and tax reporting, and compliance with local and state regulations are all aspects of rental management that can easily overwhelm any homeowner renting their vacation property.
Travelers’ expectations seem to be higher than ever, with many looking for hotel-type amenities and services when renting. Industry expert Amy Hinote recently revealed in her article “Revenge of the Property Manager” how the seemingly easy-to-use OTAs are changing business models and have caused difficulty for many homeowners and slow-to-adapt rental management companies facing fewer inquiries and increasing distribution and booking fees.
Vacation rentals have become an e-commerce business. Many VRMs use technology to directly feed property information using application program interfaces (APIs) to multiple OTAs, which integrates the OTAs with their property management system (PMS). Through these distribution channel integrations, rental exposure is increased and travelers are able to select a rental home or private accommodation from a channel that has the lowest fees and book in real time.
Just having a website is no longer an advantage. With over 60% of travel searches on mobile devices, responsive design websites that are search engine optimized with online booking are a minimum requirement to stay competitive in the evolving business of vacation rentals.
Moreover, many renters have been resistant to the traveler fees now being charged by OTAs that are in addition to the rental rate. While the large OTAs compete for market positions, dominance in online search, and increasing their “take rate” and earnings, consumers are finding they may not be the first or best choice for planning and booking that coveted vacation in “private accommodations”.
With the introduction of traveler fees, renters are now shopping harder for best rates and booking direct. VRMs have a game advantage when travelers seek to book direct and not through an OTA by offering best rate guarantees. VRMs also have local information and insiders’ tips for planning the vacation experience the OTAs cannot provide.
Experienced property managers are in a position to deliver better results with local knowledge and lower rates to travelers that book their vacation rental direct.
The value of a using a professional VRM is becoming more apparent. A VRM is better able to manage the increasing complexity of renting a vacation home and adapting to the changing industry demands in ways those homeowners and third-party booking sites cannot.
In a recent survey by Wyndham, it was reported that nearly half of all vacation travelers would choose a professionally managed rental over an owner-managed rental because “Professionally Managed Vacation Rentals instilled confidence in safety, service and standards”.
A professional management company’s value proposition for owners also includes brand recognition and the competitive advantage that comes with it, as well as the ability to deliver more consistent results regardless of the changes in the industry.
Brand competitive advantages over owner-managed rentals are distinguished by:
- A recognized company name
- Web presence that ranks well in search results
- Social media presence that continually increases the brand awareness
- A local community presence where they operate
- Standards of cleanliness and service
- Guest services and a personalization that homeowners may not be able to replicate
Brands can provide a peace of mind that large OTAs with horror stories about rental experiences in a host or owner managed rental cannot. Management companies can differentiate professionally managed vacation rentals and provide greater peace of mind to travelers. What happens if there is a problem with a home that affects the enjoyment of use or habitability? Many homeowners don’t have the resources to be prepared for the unexpected. A VRM company will often be able to respond quickly or move the renter to another property with the least disruption to their long-planned vacation and valuable time.
As Hinote suggests, travelers have a greater selection and peace of mind shopping on a VRM website. A VRM can also be candid about realistic expectations for both guests and homeowners.
Homeowners are looking for reassurance that a VRM has the knowledge, experience, and resources to deliver the best results and ease the substantial amount of time required to rent on their own. A VRM is committed to the investment, knowledge, and resources necessary to deliver better results for homeowners. After all, professional managers’ earnings are directly tied to the results achieved by a homeowner.