The most innovative management companies are evolving rapidly, and guests expect more all the time. Here are four ways to modernize your revenue-generating activities. Innovate these areas of your business to ensure your survival in the 21st century, or be doomed to lose out to more advanced competitors.
- 1. CUSTOMER DATA Do you run a data-driven business? If not, you still can, and you do not have to be a technical expert to do so.We all know the adage about customers being the best spokespeople for our companies, but “word-of-mouth” referrals can be formalized, logged and leveraged via data collection. If you operate a website, you have the opportunity to collect information not only customers, but also on every single site visitor.
Tools like Google Analytics, Woopra, and UserIQ can help you understand who your visitors are and enable your site to interact with those users while learning from those interactions to optimize online conversions. Purchase history, emails, phone numbers, physical address, referrals, and other contact information may be used for future online and offline sales and marketing efforts.
Information can be used in retargeting ad campaigns that are relevant and thus highly effective with past visitors. If you would like to initiate a deeper dive into strategies to capture and create value from data, check out this article, which breaks down four key areas of focus: performance management, data exploration, social analytics, and decision science. Google Help is a great place to start, and their U.S.-based personnel are standing by to assist you.
- 2. ONLINE BOOKING According to a HomeAway Survey of 1,441 travelers in August 2013, 92% of travelers expect online bookability.HomeAway CEO Brian Sharples recently announced at Phocuswright that all listings on their network of sites will be online bookable by 2016. In case you are one of the professionals that has listings with empty calendar slots and opaque pricing information, you still have time to update your practices before your listings are penalized.
If you do not distribute on HomeAway, you still need to adapt to guest expectations given that over 90% of guests expect online booking features. There are many competitor retail listing sites as well, of course, and all managers should highly prioritize retail distribution of their listings. Alternative distribution methods are emerging as well, and loose distribution partnerships amongst vacation rental managers led by management companies such as Discovery Holiday Homes, whose principal has laid out the perils of competing with the distribution giants in search engine marketing (SEM) with its open letter to Google, “A Cry From the Search Wilderness!” and come up with various solutions to succeed in spite of the size and budget disparities between managers and OTAs/vacation rental marketplaces.
It all comes back to consumer expectations, however, and if you are not enabling easy, online booking, you are not meeting expectations of the modern consumer.
- 3. YIELD MANAGEMENTHotels perfected it, and now innovative vacation rental service providers have brought it to vacation rentals. Your competition is using it.How do you set and adjust rental rates? If your answer is not “based on supply and demand in a dynamic manner,” you are behind the curve. Worry not, because myriad revenue management tools have hit the market recently, though they vary in terms of cost, features, data requirements, ease of integration, and complexity. Escapia users can take advantage of their Advanced Rate Engine, but there are other options out there including Smart Host, Beyond Pricing (for AirBnB listings), RateCoaster, Kigo, and more.
- 4. PROPERTY ACQUISITION Most vacation rental owners self-manage today, so you have to offer a comprehensive, valuable solution that stands out from competition to acquire properties. In short, invest in owners through guaranteed income and turnkey management service.You can offer the lowest commission rates in town, but that is a “race to the bottom” that still will not convert many rent-by-owner properties to listings in your portfolio. Furthermore, many people are apt to associate low fees with low quality, which could lead to high rates of owner attrition.
Instead, you can ensure that your business is up-to-date with the previous three approaches and then commit to an income target for each owner who entrusts her property to your care. By doing so, you would be “smoothing” the income of the owner throughout the year while providing her with full service management that saves her time and hassle.
What’s in it for you? A new property that is likely one you would not otherwise manage, but also additional control over how the property is operated and theoretically unlimited profit potential because you would keep 100% of the income in excess of the guarantee amount. You can offer this to your existing customers, new customers directly, or add them through the VacationFutures wholesale marketplace.
The vacation rental industry continues to change. There is a consolidation of management underway which should only accelerate in the coming years. Those managers that adapt to drive revenue through modern strategies such as gathering and leveraging guest data for improved online conversions, online bookings, yield management strategies, and acquisition of properties through innovative approaches should thrive as a result of said consolidation, while those that do not may go the way of the dinosaurs.
The industry has a bright future, so make sure you are a part of it.
Source: VRMA Blog
By: Mickey Kropf