All About Channels - Lodging Newsletter January 31st, 2017

By Wm. May
Published: 01/31/17 Topics: Lodging Newsletter Comments: 0

Vacation Rentals are kind of a secret industry? I don't mean that we or anyone else is withholding information, but the intricacies and extreme details needed to perform at the top of the heap continue to grow.

This is a "seemingly simple" industry that works perfectly well, as long as you have a management firm that aces hundreds of big and small details. We do that in three ways.

First, we must have highly motivated and committed people. Of course, every company will tell you that, but most do not. Hospitality, in general, and lodging, in particular, require staff who are willing to take on fast moving work that requires accuracy, all while being friendly and courteous.

Second, it requires back office expertise including sales, marketing and, most of all, technology. We build our own and it's superior to any other firm.

Third, it is our job to read industry articles, forums and keep our eyes open for new ways to increase each property's rental income while helping to control costs.

On the attached page, I thought it is time to tell you of recent happenings. We are on top of them all.

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There is local, regional, national and global news that affect vacation rentals.

Research - Everyone knows vacation rental income is growing rapidly and much faster than lodging in general. One research company says vacation rentals generated $3.36 billion dollars in revenue in 2017 and will grow at 7% for years to come. Giant companies all want a piece of the "Specialty Lodging" market.

Online Travel Agents - Expedia.com (headquartered in Seattle) and Priceline.com (known as "OTA's") each spent a whopping $3.3 BILLION ad dollars last year. They charge a very high 18% fee, usurping local lodging providers.

Book Direct - Many large hotel companies, such as Hilton and Marriott, began campaigns giving guests incentives to book directly. By saving 18%, they can do more for guests and hope to pocket a bit more for themselves. Hilton's CEO says, "It's been quite successful."

Google - Long ago, Google began inserting ads above free "organic" listings. Now they obscure websites, directing people to OTA's. In this way they get much of their combined $6.6 Billion in OTA ads. Yes, we advertise on Google, too.

HomeAway & VRBO - A year ago, HomeAway (owner of VRBO) was sold to Expedia for $4 Billion. A month later, they demanded a percentage of every booking and guests now pay a kind of surcharge on top.

Property owners and managers went postal trying to fight it with class action lawsuits, but like so many controversies, the fervor dies down and the big guys win.

AirBnB - This darling of the technical investing world continues to grow, first by offering rooms, then whole homes (vacation rentals) and now with activities, such as tours. Reported to have over 3 million listings, they are actually a good advertising platform for us and not a competitor. While others fight AirBnB, we use them.

Our Take - Although we have grown in size, any effort by managers to directly confront the changes in the vacation rental model would be foolhardy and financially wasteful. Luckily over the years, we have developed the kind of technological tools that give us an upper hand over competitors.

We operate hundreds of local tourism websites, to gain inquires for far cheaper, and our custom software sends higher, marked-up rates to expensive advertising websites, resulting in more bookings, with good profit for owners.

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PROFILE: How did we ever get by before Ozair Khalid joined our team 10 years ago. He authors all of our back-office software which helps us control marketing, advertising, sales, websites, online bookings and so much more. Ozair's mastery of our mammoth database is astonishing. He is married, is a cycling enthusiast and a positive and tolerant person and friend.

Author: Wm. May, Vortex VIP
Blog #: 0543 – 01/31/17

Sponsor: Vortex VIP – – VortexVIP.com