How to Explain Changes in Revenue and Bookings to Your Homeowners

Speaker 1: 0:00

We'll start the show in just a minute, but first a word from our premiere brand sponsor, casago, and co-sponsors Guest Ranger and Good Neighbor Tech.

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Casago's founder, steve Schwab, has been quoted as saying you can only be a local in one place. This simple yet profound statement is the basis of Casago's franchise model, which allows locally-owned vacation rental management companies the ability to compete at a national level by leveraging the system's software and support and buying power of a much larger organization.

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Visit casagocom forge slash franchise guest rangercom and goodneighbertechcom for more information.

Speaker 3: 1:37

Welcome to Alex and Annie, the real women of vacation rentals. With more than 35 years combined industry experience, alex Hussner and Annie Holcomb have teamed up to connect the dots between inspiration and opportunity, seeking to find the one story, idea, strategy or decision that led to their guest's big aha moment. Join them as they highlight the real stories behind the people and brands that have built vacation rentals into the $100 billion industry. it is today And now it's time to get real and have some fun with your hosts, alex and Annie.

Speaker 1: 2:14

Welcome to Alex and Annie, the real women of vacation rentals. I'm Alex and I'm Annie, and we're joined today with a whole panel of amazing people. This is a special bonus episode. We have Lance Stitcher, ben Coleman and Vanessa Humes here. Welcome everybody, hey guys.

Speaker 4: 2:34

Good afternoon. Thanks for having us. We've got a Lance Stitcher in the background just in case we need your help.

Speaker 2: 2:39

Oh good, back up, he's our pinch hitter.

Speaker 5: 2:42

We're going to have to call the reliever and we know we're going to need a lane, and it's always a pleasure to be with Alex and Annie, two of my favorite people.

Speaker 2: 2:50

Oh, right back at you, Ben. We love having all of you guys on there. So I think most everybody knows you guys, but why don't we do a quick introduction of who you are and what you do in the vacation rental space? Vanessa, let's go with you first.

Speaker 6: 3:04

I'm Vanessa Humes. I'm the sales director at I-D-N-D. We do website and digital marketing and specialized in the vacation rental industry.

Speaker 5: 3:14

Great Ben Ben Coleman. I founded Reven Research about two years ago. Also, i've been helping Wheelhouse help build out their program, help build out their platform for the last couple of years as well, and so we focus on what the name of the company is. We focus on driving revenue at the right times and the right places And we back that up with a lot of research and a lot of organization of data just to inform our clients and actually give our clients more control over their revenue and more comfortability over where money's moving.

Speaker 2: 3:42

Awesome. Lance and maybe Elaine can pop in and introduce yourself.

Speaker 4: 3:46

So Lance Stitcher or Lance and Elaine Stitcher Seaside Vacations and Sales in Shinkateguide, Virginia, Notion City, Maryland, We managed somewhere between 385 of 400 vacation models, a few long-term models and never real estate sales division as well, And thanks for having us today.

Speaker 2: 4:03

To be in here.

Speaker 1: 4:05

Absolutely. We're very excited to have you all here and excited to dive into this topic, which is going to be about revenue management and homeowners And, as everybody across the country is dealing with similar situations this year, that the year is not turning out to be quite as heavy for bookings, for demand, for revenue, as the last couple years have been, and for some of these new owners that have bought in the last couple of years, they're not used to what 2019 and prior really looked like. So I think there's a lot of kind of a shock and disbelief from some owners right now. But, lance, let's kick it off with you as the property manager guru of the group. Give us just a high level of what you're seeing in your world right now and what's the kind of the tone of what you're hearing from homeowners.

Speaker 4: 4:50

So most of our homeowners have been in this game prior to the pandemic, so they have an understanding of the ups and downs of the vacation rental world. Many of them got accustomed to the good days of 2020 through 2022. And they need a gentle nudge to be reminded that this is actually a little bit better than normal, that they need a little bit of a reminder. We've got a lot of homeowners that bought not second homes, not vacation homes, but they bought investment properties during the days of the pandemic And frequently they were involved in a bidding war and some of them paid significantly over market value. And we've had to be able to explain to them that, unfortunately, there's really not a direct correlation between the inflationary pressures on real estate prices and rental revenues provided by vacation levels. And then I guess the last thing I'd add in there is that we have a lot of new homeowners, there's a lot of new inventory on the market, and the additional inventory has made occupancy seem lower than it actually is. We still have a very strong group of travelers, it's just there's more inventory than there's ever been.

Speaker 2: 6:04

Yeah, so we've been hearing that kind of across the board that a couple of things that you said. There. The owners bought at the height of the market So they paid more than they typically would have paid. They had a really great run. The ones that were already in the program they had a really great run. And then there are so many more people in the market that are renting their units than there is demand, so there's like there's a lot cited balance to it. So that's where I think Ben and his team at Wheelhouse and Rev Research come in is to be able to help you navigate those conversations with the owners. I'd love to hear how you are using Ben's organization and the tools that he has to have those difficult conversations with your owners.

Speaker 4: 6:43

Sure. So Ben and I, we meet every Thursday and he also meets, i believe, on Wednesdays or earlier on Thursday with our team at Ocean City. Just to go over the data, the booking trends, looking at what our booking windows are. Do we need to discount rates or is there not enough demand at a particular timeframe that we may be looking at? Is it worth discounting rates? if there's nobody shopping, then the timing is all wrong. Having access to the data, being able to understand the data and working with somebody like Ben, who has access to a ton more data than I'm used to looking at, is it's extremely valuable because he's got a lot more insight. He's working in multiple markets and he it's. You can say, lance, it's not just you guys who are saying this in other areas, or, conversely, maybe there's something that we're doing that's not working right, or maybe we're doing something that's working really well and by working with a partner who's in Ben's position, we're able to we're able to learn a lot more about it.

Speaker 1: 7:43

Yeah, absolutely Ben. how important are booking windows this year and what have you seen as far as changes to the booking windows?

Speaker 5: 7:51

The booking windows this year are shrinking drastically and it's quite annoying, especially for somebody like me, that God for Rebecca, who's our COO, that is much more patient than I am We're seeing we're just seeing them shrink continually. Looking at data just over destined for July and seeing so much pickup in June What I would have thought by now we would see. July is a common trend where the pickup that pickup isn't. We're not in July yet, but we're seeing good pickup in June and normally you would see that in your one two bedroom condo. You would see those. You got 50 units and they're all two bedrooms. They're all decorated the same. Yeah, those are going to always have a shorter booking window, but we're actually seeing, let's just say, the top end, the luxury, the kind of not a diamond does in condo. When I say diamond does, i'm not trying to insult a condo or anybody's asset that they purchase. I really mean that there's just so much of those that are really similar. But we're really seeing the booking window shrink in luxury homes, which has really shocked me a little bit this year. I think that we've done a good job using our lead days, using the historical data and being able to get ahead, because I think it's so important to know from an ADR standpoint where we're going to end, where the market's going to end, and being able to get there quicker than the market. And that's really what we've prided ourselves on. And our goal in 2023 was really to increase our clients' booking windows And I think we've done a good job of making them not shrink as much. But what we like to do is try to stay a season ahead If booking windows are going to shrink. Lance said it very well of hey, is it worth changing a price if nobody's shopping? One thing that we've really been testing out and I wish I had enough data and enough time to really speak, to really speak to where I could say this is it. We have started seeing some good pickup down in a panhandle from August, september, october, by making price changes in mid-May, and so there are people out there shopping and I think, getting those further out prices dialed in and getting them dialed in before your competition, you're going to see some bookings at maybe not the ADR that you would like, but a realistic ADR Over last year's. Getting it closer to that earlier out is where we're really seeing that pickup And we're really seeing demand. We're really seeing it's not a lot of demand, but we're seeing good pickup And we're getting ahead of that year over year number. We're getting ahead of the market. And I think that as an industry, we've gotten so busy after COVID And, like we said, demand is still there. Inventory, the inventory's increased. It's just to me it's just the finding the time to stay ahead, finding the time to get there before the market does, because I think, as an industry, we basically said we're going to look at these seasons. This is when we know what we need to do. Hey, we don't need to worry about that, because there's no demand And we've actually. There is demand. It may not be a lot of demand, but we've outpriced ourselves and we'll get to it when we get to it. And that's what we're really trying to do is stay a season ahead of the market.

Speaker 2: 10:49

A lot of information, a lot of things that you have to be mindful of and be aware of, and I think one of the things that people need to be mindful and aware of is that you never want to stop doing your marketing. You never want to stop doing your communication. And that's where Vanessa comes into the conversation, vanessa, your organization and what you do for owners and what they're trying to do marketing-wise, and you guys have a great list of ideas and things must do. So could you go through maybe like the top five things, or maybe three things that you think people need to make sure they're doing now?

Speaker 6: 11:17

Yeah for sure. I could not agree more with Ben as far as his strategy of getting ahead of the season and always forward thinking and having that data to present to owners if they have concerns, because if you don't give them data, they're going to go find data somewhere and it might not be accurate data, as the tip is to have that information at your fingertips so that when there is a concern, or even being proactive and putting that data out to your owners and communicating on a high level some point about what's going on in the market, what are the trends, and then what are you doing about it? At the very basic level is having an email communication with your owners and sending out an email to all of your owners. It's really simple to set up something in any of the email providers out there, like MailChimp or Constant Contact, with a link to your owner portal and a link to the information. Maybe you put it on an owner's blog or have some articles available to your owners in the owner portal, because when it comes down to it, i always say, every time I listen to an owner acquisition panel at a VRMA event or an industry event, the way that we do sales is a lot like how you guys bring on new owners. It's building that relationship, nourishing that relationship, and when you do a great job for your owners, you get more owners. You get just a great review of your company, and I think that's what it's all about. But other than data and coming up with information about what you do better than your competition Because something else that's actively going on is other companies going after your owners Yeah, so it's important for you to know what their message is, so that you can be proactive with your information back to them of what you're doing and how you're doing it better. But, in addition to just an email that's going out monthly phone calls, personalized emails to your owners just nourishing that relationship is definitely a really important aspect. Some companies even take it up a notch and they'll schedule monthly or quarterly Zoom meetings with their owners so that they can communicate on a deeper level and have their marketing person in there talking about what they're doing, how they're staying ahead of that curve.

Speaker 1: 13:50

Yeah, I think that's really important too, i love that And I think even sometimes it can be hard to communicate one-on-one. if you have a big portfolio, but even just doing a pre-recorded video that you send out in the email newsletter to homeowners, or if you have a private homeowner Facebook group or anything like that, having them see your face explaining things from the boots on the ground perspective is really important because, like you touched on, vanessa, all your homeowners are definitely being solicited by all your competition this year. This is going to be a year to pick up inventory and we've talked about this a little bit that I think at the end of the year it's almost like everybody throws the contracts in the air and they've just all shuffled around People that think that one company is not doing a good job by them. It's not that they're not doing a good job, it's a sign of the times but they're going to think the grass is greener on the other side because they've gotten good marketing from somebody and switched, but that other company will also end up getting more units from somebody else, So it's really just a pass around. But that's also why it's very important to be doing homeowner marketing this year and make sure that's a strong focus. I know here in the Myrtle Beach Market, where Vanessa and I are, we've in my previous role at the company here we did homeowner marketing but we were much more focused on the guest marketing and creating that demand and book direct strategies And I think that they really go hand in hand. That if you have a great direct traffic and great business that these owners won't get otherwise unless they list with you, that becomes a really key differentiator because at the end of the day, everybody can put their properties on Verbo and Airbnb but, if you've built your own direct booking strategy and brand at a market, that's really something unique And Lance and Elaine, you guys have certainly done that And I think you've been a little bit creative, even with the posts that you've done about your staff and culture and different things. But do you find that your homeowners have they picked up on that And can they see the difference in the brand? do you think Does that help get people to you?

Speaker 4: 15:48

Oh, absolutely. Our social presence in our local markets is absolutely huge And really it's how we got our start, built our business around social, and we're maybe a little bit unique in that we drive a ton of traffic to our website, but social is usually, usually number three for us. We've got organic, direct, and then social, which is ahead of your other sources such as email and referrals, and then the smaller things down the line, but social has always been very strong for us. And another thing I'm going to back up one second to tag on to what Vanessa was saying about communicating with your owners. Number one it is amazing how much time they spend in the owner's portal, particularly in the first, between the third and the 10th. Like right now, i'm working on owner statements And I have owners that are in there just looking waiting to see when their statement's getting posted, which is always interesting. But the other thing that we've made is a huge tool for us with as far as communicating with owners, retaining owners and marketing to new owners, is the data that's available to us through key data, being able to demonstrate that, yes, the market's a little bit soft, but here's our occupancy report, here's our pacing numbers. This is where this is our benchmark compared to the rest of the market, and you can pick some key KPIs in there and then graphically demonstrate to them that maybe it's not as good as last year, but it's better than a lot of people are doing.

Speaker 1: 17:14

Yeah.

Speaker 5: 17:16

And what I'm taking. I'm taking from both of them and the entire conversation is I think it comes back to proactiveness. I think when I was running a property management company, i realized pretty quickly that our scarce asset is time. And I know that Lance I know for a fact that's Lance's scarce asset. I'm just getting more and more time to do those things, to continue to build the ship, to continue to guide the ship in the right direction. And with Lance's growth And he's been very proactive with his owners I used to like to get an email out a month to all my home owners individually just saying hey look, just wanted to update you. Hey, here's where the market is. Hey, here's where your neighbors are, here's what we are comparing you to. This is what we did, and it good or bad, and I think about it from being an entrepreneur for quite a few years now. I've bought a lot of technology, a whole lot of technology. Some of it was really good, some of it was really bad, and I'm not talking about just in the VR space, just across everything that I've done And I think back. I think back of why I stayed with maybe inferior technology for too long, and a lot of it was because of proactive service on their end. I knew that if I had an issue I could email somebody, i could give somebody a call And I knew that they were going to fix it. Yeah, and I think that anything that you can do inside of the business at the property management level, to stay ahead of a homeowner, to set a five minute email, is way better than a 30 minute call And I think that those emails getting out, that kind of getting out that data like Lance was talking about key data does such a great job in the visualization side of things. Getting that out to your homeowners lets them know one feel more comfortable. Number two it makes them feel like you really care about their asset. It makes you, it makes them think that you're actually thinking about their asset, their investment, and it gives them a comfort there. It gives them a comfort there And we were always very transparent. Hey, we may have missed this day a little bit. I held prices too long, hey, but I hey, but we're going to correct the ship, we're going to, we're going to grab money out of October this year And that's where we're going to build and make up that money And just being transparent and proactive with the owners, i think is really the key for that homeowner retention. And, as we've talked, as we come into a situation that we're in now, that's where a lot of property managers see a lot of growth in their business. You get a lot of rental by owners that that realize that they can't handle, they can't handle a softening in demand, an increase of inventory They're looking for. So I, who's a true professional, and I think that's why we're seeing a lot of homeowner turn as well with booking windows. Shrinking money on the books isn't getting there as quick And so it makes it a lot easier for that homeowner turn. And that's that's been. One of the more shocking things to me is to see homeowner turn during what we would call quote unquote booking season And I think from the revenue side of getting ahead of that staying a season ahead, keeping money on the books for homeowners, really from a comfortability standpoint, to make it as hard, hard as possible for them to want to make a change.

Speaker 2: 20:00

So I think that one of the things about all the data that we have key data is just spectacular to use and the stuff through wheelhouse is great. There's a lot of different systems out there and a lot of these individual right by owners. They have access to some of this stuff now. But I think the great thing about someone like Lance is he's the local guy. He can look at that data and he can read between the lines and know what, know how to frame the conversation And then the numbers don't get out there with somebody else framing the narrative. Like you can control the message that gets out there so that someone might see down on keep and see, but what you can see is what demand is. They were people are holding off, so we're going to adjust our rate What's going on a little better than somebody who just has access to the data with no granularity into what's driving it. So I think it goes back to something that Alex's CEO at Costco always says. But you can only be a local in one place and Lance is the local expert. And so, lance, what you've done is you've capitalized on that and your homeowners know that they can come to you to ask you about all the things that maybe that fly by night company can't give the information on, or there's a company that's based somewhere else in the world and they're not right there on the ground, so they're just reading the data but not really understanding how that data is affecting the market. Oh, absolutely.

Speaker 4: 21:13

It's been. another huge asset for us is, yes, we're locals here and we're able to understand the data And I work with. I work in a community where there's still a lot of places that are priced with. they have a lot of data They have priced with. they have four rates throughout the year. They have a summer rate, spring and fall, which are essentially the same, and they have a winter rate. We've seen other listings online where RBOs will come on and it's $200 a night. Every night you're out, And so being able to talk to these people when they're, when they become interested in working with a professional property manager, and not only having the data which having the data is great but being able to interpret it and explain it to them so that they can understand it and realize that, yes, your rate on Tuesday shouldn't be the same as your rate on Saturday And there's more demand for the third week of July than there is for the fourth week of July this year because there's an event or whatever the various reasons are. But, yes, having the ability to understand the local market conditions and almost sometimes you can, sometimes you get that sense of what's going on before the data, even before the data begins to show it. You've got it in your market.

Speaker 1: 22:20

to really understand it Do you find that you're having to explain the just the concept of revenue management to homeowners as much as you were a few years ago? or you've got a lot of legacy homeowners that have been with you for a long time but do they pretty much, do they understand what it is? or is it still a lot of education on things?

Speaker 4: 22:39

So a lot of our owners have at least a basic understanding of it now. But what I've seen is now they've become more curious about it, which I actually enjoy. That's my part of everything. Here is the. If it has to do with data or numbers, that's in my lane, and if it has to do with our two lanes that's in the lane or two lane, but no, i mean, i truly enjoy spending time working with property owners and explaining to them the whys of what we're doing, and nine times out of 10, it only takes five or 10 minutes to have to make sense of the concept on their own and in terms that they can understand. But I had a conversation yesterday with a homeowner who lost sight of apples and oranges and she got a reservation that came in for a week in July and it was a little bit lower than she thought it should be and she was comparing to other weeks on our website and then forgotten that she was looking at rates that included taxes and cleaning and linens and a reservation fee, and then she was comparing it to her net rental income, apples and oranges And it was a very quick conversation and so I'm sorry I forgot about that And it looks like we're having a great season. We are here. We're going to be soft in the second half of August. We're being proactive about that now, so don't be surprised if you see rates going down a little bit at the end of August. That type of communication is key.

Speaker 2: 23:55

Movin towards the end of the summer. You've done all these adjustments. You've been talking to Ben. You've done your proactive risk with Vanessa. We're moving into the fall, We're moving into the slower time of the year. What is your proactive nests and what do you think your stance needs to be going this year? I think that what I've seen in talking with people is again a lot of inventory, not as much demand. We definitely have gone back to a more normal sense of school calendars and when people are able to travel, But there's still quite a bit of that nomadic worker that's out there. What are you doing to talk to your owners, to frame the conversation ahead of time, knowing what you know about the fall and where we're headed?

Speaker 4: 24:34

So we're communicating with owners roughly twice a month right now, usually one email about what our marketing department is doing and then one email concerning analytics and data and what we're seeing and pricing and those type of things We know. Right now we feel like we're going to have a fairly strong fall. We did have a week spring, comparatively speaking, but in our particular market that's not totally unexpected. Up here in the Mid-Atlantic when you get near the water in April and May the water temperature is still 40, 50 degrees, so it's cold when they can go somewhere 20 miles away from the water and be 70 degrees as opposed to 50 or even 45. But anyway, we have some unique geographic issues that steer more business towards the fall. But we're prepared for that and we're watching our pickup with Ben And we feel like we're in a pretty good place for the fall. And then in our markets they're completely different because between Ocean City, maryland, and Shankatee, virginia, so I happen to have a National Wildlife Refuge here, so we have a lot of ecotourism come this way in the fall. Ocean City, maryland, after Columbus Day weekend you can almost stay almost close to doors in the town. It becomes much more hotel-oriented. We can ride our minimum nightly rates all for five months in Ocean City, maryland, and it's just. There's really no way to pick up. I've seen people drop rates as low as $15 a night for a three bedroom condo. It's still not get it. So there's just. Once again. That gets back to that earlier part of the conversations. You also have to understand the demand And I'll get back to my friends at Key Data with their demand IQ product. I see how many people are searching for a given timeframe. If there's just nobody looking to go on vacation November 12th to the 15th, it doesn't matter what the rates are. Can't do anything with that.

Speaker 1: 26:27

I think that's where the marketing comes in of. There's not necessarily demand, but how you create demand. I'm not sure how your market is, lance, but Myrtle Beach for sure. Our shoulder seasons have actually grown quite a bit over the years and there's just so many different festivals and events. I think that's where, in the fall and spring, you've got to be. In winter, you've got to be a little bit more scrappy in terms of what you're putting out there to get people to want to come. Then, of course, that's where revenue and marketing needs to work together to say, okay, we're going to do different things with our fees, we're going to do different pricing strategies here to keep the rates attractive, knowing there's less demand, but let's try and create our own. Vanessa, to that point, what would be your advice to people as they look at trying to push the shoulder seasons and what type of content they can put out there?

Speaker 6: 27:13

Yeah, definitely, like you mentioned, it's concentrating on things to do. You're creating that picture of what it's like to vacation in the shoulder season This market, myrtle Beach, or any of the beach markets. it's that secret season of coming down, the beaches are less crowded, the weather's so great. Then you can even target it to families with younger children or older retirees. You have to match your marketing towards that audience. that would be available because obviously people with kids in school are not going to be able to travel as easily. They might pick up a weekend here and there, but you're limited to those types of audiences. So if you can figment to that, then you know exactly who to target. Additionally, having your things to do segmented towards the different seasons so that people can come in and explore, having events posted and then taking all of that content and emailing them to let them know what's going on in your area.

Speaker 5: 28:27

Yeah, and I think that's such a good job of this. It really helps with Lance being one of the better property managers of interpreting and understanding data and staying on top of it. I've always just been curious how do you actually build a bridge from the revenue management side of a business to the marketing side of the business? One thing that I always like to try to do is obviously stay ahead. I never want to get behind, And so I'm just curious from the business side because I think I have some ideas. I think I'd like to hear from Lance too. How do we bridge that gap better? What does that look like? Is it just a communication thing? Do we need to add that? What are your thoughts? I'm just curious on your thoughts on how does a marketing team and revenue team work together better?

Speaker 6: 29:09

I think it is about having a better grasp of what's going on with the data and making more data-driven marketing strategies. So, like taking into consideration everything that we just talked about, that certain season and certain dates are just not going to have the demands. So is it we're trying to put somebody in that property for maybe next to nothing? Probably not, because the person that you get is probably not going to be the guest that you really want to have possibly in there. Sometimes we get in rural beach some hustle and bustle in those shoulder season times, but the rates are really low and it's a lot of wear and tear on the inventory. So, making sure that your goals are aligned together because we can drop rates and we can drive that demand. It's just in the best light of what our goals are Just having the data and the goals aligned so that if you have specific weeks that you want to market, having a way to market them on the website and promote them, and a lot of our clients will meet with the revenue manager. often The marketing team meets with the revenue management team and also meets with them to talk with owners as part of that conversation. and how are we going to position what we're doing from a marketing perspective and what we're doing from a data and revenue management perspective and communicate that to the owners. So I think that it's just having a good relationship and open communication with both of those teams really helps keep everybody aligned to the same goals.

Speaker 2: 31:02

I think that's super valuable and, having been both sides of the business, i think that was one of the things that struck me from Alex and I. Both came from similar businesses in the case journals, from our different markets, where the marketing and the revenue strategy was really intertwined and worked together. But I was surprised when I got out in the OTA space like how many departments were very misaligned, not talking together, and the revenue people were going to the marketing when they were in a pinch or vice-versa. It was never this collaborative conversation. One of the things that I wanted to pivot to is just where my wheelhouse has sat for the last few years is distribution. Now, obviously, lance is an owner. You want to have as much direct business as you can, and using Vanessa and using Ben's ability to adjust your rates accordingly is going to help you drive a lot of that. But there's no shame in the game of distribution. There's no reason that you should not use some of the channels, and I think that now that everybody's seeing the reality that we're not having 21 and 22 is going to be 23 and 24, we need to make sure that we have other levers or other tools in our toolbox, and so I always think that these type of situations where we're concerned about where the economy might be going and revenue is not where it needs to be or we're not getting the demand that we get, is using channels and getting the right channel mix, and so it's a really great time to be looking at the different channels that are out there, and I think we have more, a more variety of channels we've ever had, in that there are ones that drive specific type of customer, there are ones that drive specific length of stay, patterns of bookings, all of those things. So I think I would be interested in Ben, you coach a lot of people in this, so how do you talk to people about it's not bad to have a channel, it's good to have them, but use them in the right way to be as effective as possible.

Speaker 5: 32:44

Yeah, i think that if you think about it from just like just a pure economic perspective, we're going to have softening demand and we're going to have an increase in supply. What is the best way to counteract that without dropping rates, cause that's the last thing we ever want to do is drop rates. But we know that we have to. I think that it becomes a lot of what you're saying and getting more eyes on that rate, and it's what Lance and Vanessa said too. It's you know what there may not be demand out there and it may not matter, but then you have that kind of just a little bit ahead of that of where there is some demand. I really like to get it. But with the increase in inventory, we need more eyes on that pricing, we need more eyes on that listing, and it's it to me. Just taking Orlando, for example down there, if you're just on VRBO and Airbnb, you're going to be in trouble because most of your competition is on literally everything, and I think that we're going to have to dig, dig occupancy out of the dirt. And I think that's a lever to pull Like. If you're not, if you don't have a solid distribution strategy and you may have a great revenue management strategy, but with the amount of inventory that is really come on to, let's just say, vrbo and Airbnb, having those kind of side channels, annie, like you said, that drive specific types of guests, specific links of state. To me, the more eyes on it the better, especially right now when we're really trying to, we're really trying to dig it, we're fighting for every reservation, and so I think the more eyes on it the better, and I think that the way that channels have been built now and the way that you can mark them up, that you can really it's not as it was a few years ago where you're just getting crushed in commission fees. There's some things that you can do there with markups and different promotions to really push yourself. And Lance has a solid distribution strategy. I can see him nod in his head that he wants to say something, and I want to hear what he has to say.

Speaker 4: 34:27

I don't know. Well, thank you, ben. But now, distribution is incredibly important. In the most simplistic terms, I've got 10 widgets to sell. If I can show those widgets to 10 people versus 100 people versus 1,000 people, i'm going to be able to get a little bit more money from my widgets the more people I can show them to. Anyway, at least that simple. And then, if you want to, we can go way down the distribution rabbit hole, because we do find that certain channels do better with certain markets, certain lengths of stay, certain dollar values, in particular seasons. There are channels that provide a higher quality guests on average than other channels do. But anybody who has been working in the distribution or working with distribution for any length of time is really it's really easily and quick to spot these patterns and understanding what the guest personas and profiles are. And I want to rewind one second about Ben's bridge. Yeah, probably the most crucial thing that goes on around here on a daily basis is we were fortunate or unfortunate, depending on the day, but we have an open office here. There are no walls, there are no cubicles, it's wide open. So marketing is sitting beside me, our marketing assistant is sitting across from each and our reservations team is essentially in the room as well, and you are. Yes, this Kelly, me, my, my unofficial niece just walked in and I'm not better yet, but she's waiting for me. But anyway, the so it's incredibly important. If I'm going to be making some changes in rates, either up or down, marketing needs to know about that. Hopefully they can understand why we're taking the actions we're doing and then they can actually talk about it or various marketing channels. At the same time. The reservations team can hear these conversations And now when a guest calls in, reservations understands if prices are trending up or trending down and they have a little bit better ability to explain that if somebody's asking. But also we get great feedback from reservations, because reservations is going to tell us if the guest. Or the guest are saying it's a great deal, maybe we can squeeze a little bit more out of it. Or guest are calling in and they're balking at booking because they're shopping for price And then we know that we need to be a little bit more aggressive. So the communications flows through all departments. It has to.

Speaker 1: 36:45

Yeah, that's such a great point And I don't think that's talked about enough, to be honest that there is definitely still a value to have an internal team that is working in the office and in that situation where they can hear what's going on, i think the reservation sales team they're going to be the first ones to know if something's wrong with your website, if something's wrong with emails that you send out. They really are like the safeguard to a business. But I think, as things have changed in the last few years, it's so many companies just rely just on Burbank Airbnb. They really they're not putting that emphasis on reservation sales and phone call business, but in a lot of markets it's still a very important part of the whole mix. And if something is complicated, expensive and there's a value to that person that they are responsible to a bunch of people, if they buy it, they need to talk to somebody And all of those things qualify for a big vacation rental booking that your family is counting on you. It's definitely expensive and it could be complicated. There's a lot of questions. I think that's definitely an advantage that you guys have there for sure.

Speaker 2: 37:50

So I think we've touched on a lot of different things and I would love to schedule you guys to come back so we can do a look back over how everything landed this year. I'd love to hear just from your perspective and maybe we'll start with you, Vanessa What do you think is something that, within revenue marketing owner relations, is not being talked about or maybe needs to be talked about more within our industry. That's a great question.

Speaker 6: 38:16

I think that the communication between revenue management and the communication with marketing and, like we talked about, with so much more inventory that's on the OTA, that it's a really big advantage when you're talking to somebody who is an RBO, that having your direct booking strategy and being able to market effectively and have all this information in this tech stack build up, that's something. When you're small it's a lot harder to achieve And it's a lot of experience that folks like Lance and Elaine have built up and over the years of learning and trial and error and adding all of this technology to their wheelhouse and being able to communicate that to an owner who is an RBO. I think that it just that rising tide lifts all boats. Having that information and somebody who has experienced in that local market is such a great thing And I think that is talked about. But just specifically of what an advantage that a professional vacation rental management company like these side vacations has over. Eventually technology will catch up and they'll have they are having more access to these things, but it's just the right technology looking at the right data, absolutely.

Speaker 2: 39:52

Lance. What do you think is maybe missing or not talked about enough?

Speaker 4: 39:56

We've covered a lot here. I think a big conversation that's going to be. I'm wondering if we're not going to see some inventory contraction over the next six to 18 months. Yeah Yeah, a lot of these new investors bought, instead of buying, beachfront homes where from beachfront through rows one, two and three were always traditional vacation rentals And maybe rows four through eight were more residential neighborhoods. We saw a lot of that inventory and that, getting back farther away from the true vacation destination, has been purchased and turned into rental properties. I don't think they're going to continue to perform well enough to make these investors happy And I think some of that inventory may turn back to the more traditional second home family vacation home. It'll probably leave somebody's investment portfolio. And then another thing that is of interest is watching interest rates and what's happening with that, because we've got a bunch of people that are sitting on 2.5% mortgages And maybe they're not exactly happy with the way things are performing, but they can't bear to let go of that 2.5% money and they can't roll it into something and go for a 6.5% or 7% mortgage but just doesn't make any financial sense. So watching the overall financial picture play out with how it's going to relate to some of these homes that were purchased in 21, 22, second half of 2020,. Seeing how all that plays out, how it impacts inventory, is going to be a great curiosity. And then the other thing is it's like we were talking about. It's going to be the better companies are going to sharpen that communication between the Revenue Management Department, if they have one. If not, they're developing it right now but that level of communication between Revenue Management and marketing and reservations, and not just learning what data needs to be shared, when and how it needs to be shared, because the analytical people don't speak the same language all the time as the more visual marketing people, for lack of a better way to explain it. So those are the areas that I think that are going to see a lot of coverage this fall, and probably at several different conferences where I'll see all your shining faces at.

Speaker 1: 42:09

Very well said. Then, what do you think?

Speaker 5: 42:13

I've got to say three things. I'm only going to say two, just for the sake of just be two long things. I want to keep it short and sweet. I really believe our industry was really built off of managing second homes and managing vacation homes that the grandparents had owned and their hey, the kids are going to come down for fourth of July. They're going to take their kids to spring break and then the grandkids get a week in the summer. In those real estate transactions that were at the top of the market over the last few years, they weren't going from second home to be another second home, they were going second home to be to an investment. I say that because I think it's going to be more and more important at the property management level to use revenue management as the tip of the sphere for acquisition. If you could imagine, i talk to property managers all the time and I'm looking at how they run projections and it's all right. This is what you're going to make, this is what your rate is going to be in the summer, and changing the conversation from what's called rate management to this is your rate in the summer, versus moving it into a holistic revenue management strategy and taking the professionalization of that. We've established ourselves as professional property managers that we're going to keep your home up to date, we're going to protect your asset from just an aesthetics point of view, but I think now we're going to have to start getting into a more holistic approach of revenue and actually creating these investors' budgets going. Hey, we and what Lance said earlier I am sorry that you overpaid for your home, but hey, we're going to get as close as we can to your mortgage payment. But hey, this is what we know in the market. This is what we know is going to happen. This is where we know cash flow. This is where we know you're going to be cash flow positive. This is where we know we're going to be cash flow negative. And explaining that to them. I also agree with Lance that it'll be interesting to see what happens in the next 16 to 18 months of how these investment properties change hands. Do they start shutting down, do they go long term? It will be very interesting to watch, i think. Number two I don't think we talk about being the proactive enough from a marketing and revenue standpoint. One thing that I always used to like to do was hey, and Lance knows, and I know, and most of the people that listen, and you've been in your market for a while where your months are going to be soft. What part of your inventory is going to be soft And so say that we're coming to, we're going to come? let's use the panhandle as an example. August is looking okay, september, october there we're seeing a little bit more pickup than I thought we would in September, but we know they're going to be tough months. Why are we not looking back at what, like just historically, has underperformed in those shoulder seasons? And then let's look at the guests that stayed in those houses over the last couple of years, over all seasons, and let's be proactive and get our data organized for from a marketing standpoint and kind of a guest data standpoint, and then let's get our organization on the revenue management side so we can work together better. And I think that's really how we build the bridge of knowing the seasonality and knowing what parts of the inventory are going to struggle. So instead of just sending out a massive email blast, hey, let's just send it to people in the state six bedroom houses between July and December over the last couple of years and being able to segment that out and really turn an email into kind of a behaviorally targeted ad and make it and move it more that way. I think it's something that that is going to continue to be talked to And I would, if you want to call it forecast, predict that we're going to have a lot more of these conversations at conferences with revenue people and marketing people and revenue companies and marketing companies. I think, as we see, as we see demand soften, as we see inventory rise, it's going to become more and more of a conversation. And the last thing I'll say is just document everything. If you're like Lance said, if you're building a revenue management strategy right now and you're getting ready to hire a revenue manager, go ahead and start documenting everything. Document how you do it, document from step one to step a hundred, so that when you bring that revenue manager in or you're going to promote somebody internally to start helping you out with rates, that they know your process and also know your expectations, cause I see this happen all the time with somebody hiring a revenue manager, and then now, all of a sudden, lance has mattered and heck, it's somebody, because they Lance didn't communicate exact expectations cause he knows his market so well, and all of a sudden we have a break there and all of a sudden you've got, you've hired a revenue manager. That's not cheap And basically they. It's basically been a six month training process where it should have been one to two.

Speaker 1: 46:25

Yeah, Great points. And I think, touching on the human capital, there is an important one too, And that's probably a whole other panel we could do about how to how to find and train revenue managers. But in the meantime, I think you guys are just a wealth of knowledge for our audience and worth it, So thankful to have you. If anybody needs help with revenue management strategies Ben and Reven Research they are your team, They are amazing to work with and we highly recommend them. If anybody needs help with marketing direct booking marketing, communicating all of this that we just talked about to your owners please reach out to Vanessa and ICND They are also exceptional at this and the leaders in vacation middle marketing. And if you just want to have fun with the coolest guy that knows everything about the industry, call Lance and Elaine And. Elaine, they are the power couple For sure. Wealth and knowledge. But thank you guys so much for joining us. Thank you so much for all the support. Everybody are in the show notes on how to contact everybody on the panel today, But in the meantime, if you want to get in touch with Annie and I, you can go to alexandannipodcastcom. And until next time, thank you everybody.