Adapting to Regulatory Changes and Exploring Growth Strategies in Vacation Rentals with Erin Booth of Summit Mountain Rentals

Alex:
Welcome to Alex and Annie, The Real Women of Vacation Rentals. I'm Alex. And I'm Annie. And we are joined today with Erin Booth, who is the COO of Summit Mountain Rentals in Colorado. Erin, thank you so much for joining us today.

Annie:
Well, Erin, we've got lots of friends all around the country, and being beach girls, we love to entertain and talk to girls from the mountain. But before we get into that, why don't you tell us a little bit about your history in the business and how you got to Summit Mountain Rentals?

Erin Booth:
Yeah. So I've been in the vacation rental industry for about 10 years now. I started with just one unit in Brooklyn Heights. I then ventured out to this wild location called Fire Island. I had never been there before. I took the job before I even got out there. It's a wonderful place in New York where you have to take a ferry. There are no cars on the island. It's a very unique place to operate. From there, we actually sold to Vacasa and I stayed on board as their general manager for the state of New York. I was with them for four years. And now I am here as the COO in Summit County.

Alex:
Wow. It's interesting too, not only Colorado, but New York and managing properties up there is also quite different from, you know, where we are in these beach markets. So you were with Vacasa and let's kind of unravel that a little bit. Yeah. Tell us about before the acquisition and what happened going into that acquisition. Like what was going on at the company that spurred them to make that decision to sell? And like, when was that too?

Erin Booth:
Yeah, so that would have been closer to five years ago because I was, I was only with Picasa for the four years and, and grew very quickly with them. But the company that I was a part of, it was very small and it was born out of Hurricane Sandy of all things. Uh, Fire Island was very negatively impacted by that hurricane, super storm rather. And the owners of that company, they were real estate agents and they saw a phenomenal opportunity to acquire a bunch of properties on the island and flip them into vacation rentals. So the vacation rental segment of their business was born completely by accident. being real estate agents, they really needed to build and bring on a team to structure that business and to make it profitable. So that's when I joined. I believe I joined as a reservationist. And within two years, I was their director of ops. But I also seized an opportunity where I knew they were building and I could show my stuff and try to grow with them. But ultimately, the decision to sell was due to the owners wanting to focus more on their real estate activities. And they had come up with a phenomenal build company where they were constructing, designing all of these gorgeous mega million homes. And it was time for them to separate from the business. And I'll never forget, I had a conversation with the owner of the company and he, when he knew he was ready, he asked me, you know, what do you think I should do? And I had said, We're in an incredible position. We're in such a unique operational market. The price point is phenomenal. It's something that I believe has a lot of potential. But for you as the owner, I think it is time for you to get out. You personally, it's time to get out, if that makes sense.

Alex:
Yeah. Yeah, that does make sense.

Annie:
Nice to be able to say that to somebody and be able to give your opinion and then take it and not be insulted and say like, no, I want to stay because then you don't know where you're going to be. But you stayed, so Vacasa bought it and you stuck around. And what did that look like for you? Because obviously going from a homegrown business that's run locally to a business that's basically run from the other side of the country. And again, Fire Island, completely different than most of the markets that they had probably been in. Was it an eye-opener for them and for you as a transition to their company?

Erin Booth:
It definitely was. And I think that Vacasa was very open to my suggestions. I wasn't shy about them at all. And I had expressed to my regional director at the time, in order for this to work, there are 15 things that we have to do differently here that are outside of FACASA's normal business model. And I need for you to trust me now from day one, this is the path that we need to go down. And I was very lucky that I was given that. It was definitely challenging. I hadn't lived on the island previously, I was commuting. So the biggest change for me was physically moving to the island and living there for six months. I mean, there's one tiny little grocery store and you can get a packet of strawberries for $15. You get really creative really quickly. I started making my own bread way before COVID, just because. Wow. It was just such a unique experience, but I am really thankful that they listened and really gave me what I needed to run it super successfully that first year.

Alex:
I'm interested, what were the things that you said that have to happen that are different about how you operated versus how Vacasa corporate operated?

Erin Booth:
The largest one was definitely staff housing. Trying to explain to my new higher ups that should your guests find themselves in a position where they truly do need assistance, which would only happen, the most times that that happened were three or four times in a season. But when it does happen, it's extremely serious. It's usually an accident or an injury or something along those lines. If you don't have a physical presence on that island, you can't get there. The ferries do not run. They're on a very, very tight schedule. The alternative would be living on the other side of the island and having a company boat that you could just jump on and get over. too. So that was a big one because it was a really heavy investment. I'm not sure what it's like today in Vacasa, but at that time it was extremely unique. The only other location that supported that was Martha's Vineyard in Maine. Wow.

Alex:
I mean, staffing must've been a challenge just in general. I mean, even before COVID because of the location.

Erin Booth:
I was very lucky to have family and friends that I hired immediately. Oh, wow.

Alex:
Keeping it in the fam. And then, so you got promoted to director of all of New York. I mean, that's a massive territory. How did that transition and opportunity come about?

Erin Booth:
My company that was acquired by Van Cusick was also in the Hamptons. We had a very, very small presence there. I think we sold about 12 units with that acquisition and we had about 80 on Fire Island. So when I came on board, I was managing both of those territories. for the state. And it was the CASA's first foray into New York. It is such a heavily regulated, complicated state that they were hesitant to to get in there. But once they did on Fire Island and the Hamptons, they had made two acquisitions, one in the Finger Lakes and one in the Adirondacks. It simply happened organically. I had a great first season with them managing both of those markets and After they brought on those two additional upstates areas, I was presented with the opportunity. So it really just happened organically.

Annie:
And what beautiful locations to have to go to. Operationally though, too. I mean, the Hamptons is a, is a unique market in itself just because of the clientele that goes there, right?

Erin Booth:
Yeah, it's very unique. It's very, very unique. It's a tough one to tackle.

Annie:
I bet. Did you move? to Colorado with Vacasa? Or did you stay with Vacasa and then leave to go to Summit Mountain?

Erin Booth:
When the company was acquired, I had let my management know at Vacasa that I actually was looking to get out of operations. I was a little tired, a little spent. It's a challenge. You're really pushing yourself super hard in the operational world and complicate things with answering a phone while riding a bike while you're dragging a wagon with an air conditioner on it.

Alex:
It's a perfect depiction. It was.

Erin Booth:
It was wild. So I had decided after the acquisition that I wanted to go into the corporate world. So we met in the middle and it was approved for me to move to Portland for six months out of the year, so long as I was physically on the island to operate it to success for the difference of the six months. So we came to an in-between decision. And then as the state grew, I mean, the Finger Lakes The acquisition that we made there was 15 units. I believe today there's somewhere around 170. And that growth happened within a 12 month period of time when I was there. So the markets outgrew the need for me to have a physical presence there. So I was able to move myself away from that. And I actually resided in Portland, but for the majority of my career, I was six months and six months with them. Wow.

Alex:
So you get brought on to Summit Mountain Rentals as COO, and I think they brought you in for a specific reason. You and I had chatted before the episode today, and actually Simon Lehman connected us, and we were joking earlier, we weren't exactly sure what he had in mind, but Just enjoyed that conversation, which led to this one. But I loved hearing the story of the couple that owns the business and why they brought you on. So can you share a little bit about what that looked like?

Erin Booth:
Yeah, absolutely. So the owners of Summit Mountain Rentals, they identified three years ago that the regulatory climate here in Colorado, but specifically in Breckenridge, was taking a turn away from being vacation rental management company friendly. A lot of things have been, there are a lot of new taxes, there are new zones, there are new regulatory requirements that are truly hindering the success of companies like mine here. For example, if you were to buy a home in Breckenridge tomorrow, it could take you anywhere from three to five years to get a rental license in order to operate. So there are things that are being put into play now that are truly impacting our business today, but we'll continue to do so for the foreseeable future unless that drastically turns around. So they wanted to bring someone on board who had experience in growing into other markets and making that a successful transition, whether it was through organic growth or through an acquisition that was then brought into the fold. So that was the prime reason why they brought me on board.

Annie:
That's really smart of them to, well, one, to have that foresight and think about it. Because I think so many people think that they're going to be able to manage through these regulatory issues and manage through the challenges in a market. And if you're not looking to have a diverse set of inventory, you can, you know, Alex and I talk about it all the time, and we work for companies that all of their inventory sits on beaches. And I know from being in Florida, if there's a hurricane in the Gulf, it shuts down. Whether we have a storm or not, the reservations just stop and so being able to have a balance, you have cash flow different times of the year, but then if you do again have some of your inventory that gets shut down for one reason or another, you have a balance in your balance sheet, so to speak, and can move your staffing around. But we've talked to, Sarah Bradford is a good person to talk to about the regulatory issues in Colorado. And she actually decided it was kind of the reason that she decided to sell her business. She was just like, I'm exhausted and I can't fight it anymore. And I visited the Keystone area and Breckenridge and that area a couple of times. And I, every time I walk away from it, I'm always dumbfounded. And I think it's just like living here at the beach. The people that think that shutting down vacation rentals is the answer to the problem. That nobody can really identify the problem but in your area like what do you what do you think? Ultimately will be the outcome of this because they are be going very hard at trying to shut it down and if it does I mean that that puts out all the businesses that depend on or live off of The rental industry that comes in and I don't understand why the community is so short-sighted and doesn't understand that so you're you're new from New York not new new but relatively new. What are your thoughts on why that has come to be and how do you manage through it?

Erin Booth:
It's such a challenging issue that our industry faces and for individuals like myself who are very thick in the weeds, it's a no-brainer, right? If you shut down the vacation rental business, you're going to directly impact the employee housing occupancy level that you're fighting so hard to make available. If we're not able to operate year round, we're not going to be able to staff year round. So those employee housing new options will sit vacant at the restaurants and the T-shirt shops and the cute little chocolate selling stores. You know, they won't be able to stay open either. It will completely deteriorate the town and the economy, the tourism economy here?

Alex:
Well, and the crazy thing is, it's like in these areas that have always been tourist destinations, it's not like, I mean, Airbnb and the influx of demand through that is amplified over the last few years post coven but it's not that this is a new thing. And, you know, it's just it's it's startling to me that, you know, city councils and the people making these decisions don't understand that how important tourism is to the backbone of the local economy, and I I hope that there's at least some you know impact studies that have been done in the areas like where where sarah operates Or operated to show the effect that that has had. I mean worrying about the housing. I mean the the vacationers are not staying in Housing that workers would be staying in. I mean like that's just not that's not the case so it's like there's got to be a better way and you know, obviously building the workforce housing and something that's going to be affordable to get people to come in there for sure. I mean, that's a great solution. But, you know, shutting everything down completely is is just going to, you know, create a complete economic downfall for not only the cities, but the states and the state, you know, depends on that revenue coming in from these tourist destinations.

Erin Booth:
Absolutely and I think that it is essential for property managers like ourselves who are finding yourself in this situation to attend those city council meetings to get your opinion out there and to go with a prepared plan of how this will negatively impact the community but by showing example of how it will immediately impact your business. So a great example of that is there's a potential change to taxation. There's a bill that's being discussed now, which won't bore us all, but should you rent more than 90 nights, you will be in a different tax bracket. I believe that number is around 27%. If you rent for less than 90 nights, it stays at that 7% number. So naturally what's going to happen if something like that passes is that our owners will say, let's just rent for peak, let's just rent for 90% and then not rent for the difference. We have a 50 person infrastructure here. We have a full maintenance, a year round salaried full maintenance team. We have a quality assurance department We have an owner arrival quality assurance department. They're all year round positions. What happens to that structure if that goes away, if we can't employ them because we're simply not in business?

Alex:
And the crazy thing is it's like, I mean, in the Myrtle Beach market, we're doing as much as possible as a destination to build up that non-peak business that we know we're going to get June, July, and August. But we want the summer and the shoulder stays and the fall and winter, we want all of that. Because as a destination, we know that that supports all the businesses here. I mean, the dry cleaners. Everything I mean the businesses that if you looked at them for face value have no direct connection to tourism they all have a direction or direct connection to tourism because people that work in tourism, use those businesses locally and as well as the visitors that come to the destination. But yeah, it's challenging times, and not just in your area. We feel terrible for anybody that's impacted by it. And I really think it goes down to, or comes back to, just more education from the destination level. to these municipalities and city councils and Destinations International. It's a great organization that I know VRMA is in more conversations with, and hopefully that can lead to something. But there's just got to be better conversation around what it is. And we say it. We had the t-shirt. We got yelled at, but we still have it anyways. Hashtag, we're not Airbnb. I mean, we're not. It's a listing site. What we do as an industry has been around for decades and has provided wonderful jobs and quality of life for tourists and visitors coming to areas. It's challenging. We'll be back in just a minute after a word from our premier brand sponsor, Xtend Team.

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Erin Booth:
It's sad to see that a lot of property management companies are holding under that pressure. They're seeing that they're up against, you know, this potential change. You've seen it happen in other areas. I mean, what's going on on the Oregon coast right now is just insane to me. I mean, they're limiting the amount of rental licenses in an area. If there are 500, that number is now 50 and they're rescinding licenses. I mean, that's worst case scenario, but. If you are proud of your business and if you have built something strong that has legs that you can stand behind, you have to adapt to this. So that is, we have 345 units here. We have this amazing infrastructure. We have a phenomenal business development department. We're not going anywhere. We don't plan on going anywhere. We're not packing up here. But we also know that in order to keep our business alive, we have to diversify and we have to go somewhere else. So that's really the focus right now.

Annie:
And you bring up a really good point about going to the meetings, because one of the things that I think that we've encountered is a lot of the smaller operators, and this is where Alex and I really try to focus a lot of our attention on, is education. within the newer people that come in the business and making sure that they understand that they have to be involved because even if they have two units what's happening to the 345 unit company is going to happen to their two units and they have to be they have to be a voice they have to be part of that voice and going to these meetings is really important because you don't, you know, your owners don't have a vote unless they live there. They're not able to go in there and have their voice heard. They can say whatever they want, but they're looked at as an outsider. They're looked at somebody who just is an absentee owner, has some property, isn't really invested in the community. And so I think it's important to remind people that it doesn't matter if you have one unit or you have 400 units, you need to be present and you need to engage and not look at your competitors as competitors in this space and topic of advocacy, because everybody has to be one voice for the industry overall.

Erin Booth:
Absolutely. And I'm sure that that changes property manager to property manager, depending on what your owner profile is. So for us here at Summit Mountain Rentals, we actively engage on working with homeowners who love to come to their properties. They love to be up here. This is a special place for them, whether they can come once a year, twice a year, whatever they may be. They're very connected to this area and to us because we were able to keep those vacations alive for them. They wouldn't otherwise be able to have it. So whether your owner profile is an investment owner or if it's an owner who is really, really attached to the location in the home, you have to assist them and guide them and educate them on what is happening.

Alex:
Yeah. Well, I think that's great though, too, that your owners are that invested in, in the area. And I think some, a lot of areas where you see more issues, it is, you know, it's properties that have been bought by investors and they're not participating in any sort of capacity, um, and helping not only the rental companies, but just the destinations and those conversations move forward. So that's, that's the one good thing you have going for your area for sure. Is your, your 345, are they grandfathered in? I would assume so.

Erin Booth:
They are licensed, so everyone that we're representing right now is licensed. We do have a fair amount of homeowners who are waiting to be licensed. And obviously, for obvious reasons, we can't take them on until then. But our 345 are solid. It's just going to drastically impact what we're able to do going forward.

Alex:
Yeah. So on that note, when we last spoke, you were telling me a little bit about your expansion plans and trying to look at other areas that Summit Mountain Rentals can go and probably use a different name. That really only works within Summit. County, but tell us a little bit about what you've got your eye on and what that process is like, because I think it's an interesting time within the industry of not only people that bought properties, whether they were managing themselves and they're realizing that it's more complicated and You know, the competition is so much steeper now than it was a couple of years ago. You've got that inventory that they're, you know, hopefully going on to a professional managed rental inventory program. Um, but then you also have business owners that this has been a tough, a tough couple of years. And for people that you've been doing this for a long time, maybe this is the year that you decide, you know what, I want to get my books in order and I'm ready to do something different with my life. And hopefully there'll be some connection there. with your efforts, but tell us a little bit about the process where you're looking at and what the experience has been so far.

Erin Booth:
Yeah, so we have taken a very data-driven approach to determine where we want to be in the United States. I guess the first one was, are we staying in the United States? Are we willing to go larger? And absolutely looking to stay in the United States right now. We did spend, I mentioned to you before, we did spend a small fortune on a data report from KeyData. We simply asked them to provide us with all of the counties in the United States that have 2,000 or more homes in a designated area. And then we really took that 12,000 row document and picked it apart, looked at ADR, looked at occupancy, just really quantified those counties to ensure that they were somewhere that we would want to enter into. After that stage happened, we had to qualify them. And we knew that we were not looking to enter into a heavily regulated market.

Alex:
Yeah, you don't want to go from one to another, that's for sure.

Erin Booth:
Plans to diversify and to try to get yourself a safe landing pad. Don't set yourself up for failure, which was very challenging for me because I still have a home in Portland, Oregon, and I would have wanted to have brought us back there. It's too dangerous from a regulatory standpoint. So we then brought that list down to about 15 destinations, broke them apart again, qualified them based on our vision, mission, values. What drives us as an organization? and settled on a few areas in Florida specifically that we are actively pursuing either acquisitions or organic growth.

Annie:
There was a lot of growth in Florida. That is for sure. I think it's like the hottest state for people to move and acquire vacation rentals. But I also think that that means it's ripe for opportunity when, um, I don't want to say the dust settles, but when the fever breaks, um, I think that that will happen. I've been in the panhandle for 30 plus years and I've seen it kind of ebb and flow. And I think we're, we're about due for another cycle. And there's a lot of people that are just exhausted. And to your point, you're like, they're tired of fighting. The worry of regulations, they've been through oil spills and hurricanes and COVID and all of that, and they're just like, you know, I built a good business, it's time for me to pass it on to somebody else. I think you have a lot of opportunity within this state or even this region if you so decide that the panhandle is an area. I, for one, would love to have somebody like Summit Mountain in this market. We need some strong leaders. There's been a lot that have been acquired by Vacasa and some other large companies. And we've lost a lot of that local kind of charm that some of the local companies offered to the market. So it would be great to have somebody that likes to operate locally.

Erin Booth:
I don't want to say the wrong thing. I don't want to say we're looking for other property managers who are tired and exhausted. In a sense, we are 100% looking for an operator who has invested in their organization and truly wants to leave it in good hands for whatever reason. They may not want to be in it any longer. But we are positioning ourselves as a company that is going to, I mean, I'm going to be there. We do want to take care of their organization, bring it into the fold and continue to grow that legacy for that owner. true intentions behind that, as opposed to just adding to our property count and expanding to other areas as an investment, solely as an investment.

Alex:
What are some of the things that you're putting in place now to be able to prepare you for that growth? I mean, geographically, quite a long ways if you were to get a company down in the panhandle from Summit County, but what are some of the things you're putting in place with the understanding that I feel like there's been companies that have been trying to expand out of their market in a similar fashion for a long time. Some have, and some have done well, and some have not done well with that acquisition. And I'm sure you saw a lot on the VCASA front in that, but how are you preparing for if you were to find a company?

Erin Booth:
Yeah, I think the simplest way to phrase it is we're not putting ourselves in any kind of a box. I don't think that it is fair or reasonable to go into any new territory and assume that just because you have success in a mountain town as a property manager up here in Summit County, you're instantly going to have success in a beach market. That is extremely short-sighted and foolish. So the intention would be to organically develop our operations solely based on the needs of that locality, that community, that owner, those realtors, and pay attention to what is going on as opposed to coming in These are our 97 processes for success. We're going to try to force that into this box. So keeping an open mind. But I mean, with that in mind, though, I feel I have a slight upper hand. You know, here at Summit Mountain Rentals, we have over 200 years of combined vacation rental management experience with the staff that we have here. It wouldn't be going in completely new and blind. It's just respecting the community and the needs of that community and therefore the business that's going to come out of it.

Alex:
Yeah, and being adaptive. Just like you were when Vacasa purchased the Fire Island Company, you went to them and told them, these are the things that just are not going to fly. You know, probably same thing you'll see down there that you'll find that the company you acquire, there's going to be things that they bring to you that are different than how Summit County operates. But I think just having that right mindset of being flexible, being adaptable, exactly how you put it. I mean, just because you're successful in one destination does not guarantee all those things will work in the other. But picking the right company, not just because of the property count or the properties, but the team. You know, I mean, that's a big part, too. I mean, when you buy a business, you're buying the properties, the contracts, and in a lot of cases you're buying it because of the people that they have. Sometimes it's you're buying more from one side than the other, but in a perfect world you've got both.

Annie:
Yeah, well I think whatever you decide to do is going to be amazing, but I think Alex had one more question before we wrap things up.

Alex:
Yeah, I wanted to touch on real quick mentorship and what you've been able to bring to the company. I know you've got several gals that work underneath you and two that you're bringing to VRMA next week with you, but how have you evolved in that journey personally and then also for what you're able to do for those employees?

Erin Booth:
Sure. I wasn't shy earlier on in my career and really reached out to, to individuals asking for some support, some mentorship, potentially some guidance, whether it was through direct connections on LinkedIn or meeting them at conferences. And that proved itself to be, I mean, that made, that made my career. I was able to connect with some incredible females specifically in the industry who were more than happy and thankful that I had reached out looking for. for some kind of guidance. And it was such a beautiful mentor-mentee relationship that I started building that into my management style. And I had employed some wonderful individuals who have gone on to some incredible things with that mentor-mentee style. And now I am, I've joined Michelle Marquis. I'm not sure if there's an official name for that mentor-mentee organization, but I have a mentee and She educates me just as much as I educate her. So I can't speak highly enough about what a mentorship type relationship can do for anyone in this space.

Annie:
What would be your advice about getting a mentor? I think we talked about it off camera about not being afraid to get out there and ask. I think you have a great example for yourself.

Erin Booth:
At different times in my career, it truly was just not being shy about reaching out. And most recently, I reached out to Jen Ford on LinkedIn and just asked her if she would be willing to have a quick conversation specifically about some financial initiatives that we are taking on here at Summit Mountain Rentals, and she couldn't have been happier. We had a wonderful one-hour conversation, and who knows where that's going to go. So just don't be shy. Don't be afraid to reach out. You will be surprised at the response that you get. And don't let it hurt your feelings if you don't get one. Just move on to the next.

Alex:
Exactly. Yeah. You can't take it personal, but we talk about this a lot on the show, just, you know, the importance of asking for help, reaching out for sure, just like you said. And when you ask somebody for help, they become invested in your success too. So it's like you've got now another supporter that wants to see you succeed. And I think the more that you can then pay that back to somebody else, which definitely sounds like you're doing the more that that just, you know, starts to breed a really nice atmosphere there for the people that you're working with. I'm glad that Simon connected us. We weren't sure why, but truly enjoyed getting to know you more and getting to meet you in person next week at VRMA. So this episode will actually air on Wednesday as some people are flying home. So we hope everybody had a great show, but until the next time that we see you, for any of our listeners, what's the best way for them to reach out?

Erin Booth:
You can reach me at Erin at summitrentals.com or by phone 503-453-3354. Perfect.

Alex:
And if anybody wants to get in touch with Annie and I, you can go to alexandanniepodcast.com and until next time, thanks for tuning in everybody.