Bee Boppin' with Ben Coleman: Revenue Management vs. Revenue Performance

Ben Coleman: 0:03

Welcome to Alex and Annie, the real women of vacation rentals. I'm Alex. And I'm Annie. And we are joined today with Ben Coleman, who is the president of Reverend research. Ben, welcome to the show. Oh, thank you, ladies so much. It's such an honor to be here. Yeah, just watching this podcast grow and talk, you know, meet Annie first in Vegas last year, and then meeting you at Amy Hinotes's women's conference in December to see, to see what y'all have done. And what such a short time is so impressive. And I've just been, it's been such a pleasure to watch. Oh, thank you very much. We're super excited to have you here today. And just getting to know you over the last year has been such a pleasure. And it's great to call you, a friend and a colleague now. But so we want to we want to hear a little bit more about who you are. And I think you've got some incredible stories that I've heard tell some of the stories to me and other people and people are just kind of in awe of all the things that you've done your short lifetime. But can you give our audience just a little bit of history of who you are and your involvement within the tribal space? Yeah, absolutely. i It's kind of a funny story. And just kind of the way I just I was listening to Koryn from Breezeways episode yesterday. And she just said it hit me again, it's like, there's no way that got into this space on purpose, right. Didn't really set out or very few people set out to be property managers are in the vacation rental space. But I grew up in Birmingham, Alabama, we had a condo down in Destin or multiple condos growing up my grandmother, you know, read them on paper, you know, she still has a calendar for the family to come down. But I didn't realize growing up for let's say 20 years that I was in really the Mecca or the biggest probably, or the biggest area of vacation rentals in the country and grew up there. I just had no clue that this was a business. I mean, just never, never dawned on me that you can make a business out of other people's assets that you can make, you can make real money that you can bring real value to other people's lives from managing their assets growing up. But when I was 24, I decided after some work things and that's a whole nother story. But we moved down to Mexico, this little island off the coast of Cancun called the Isla Mujeresabout six miles, about six or seven miles long, probably about three 350 Vacation Rentals. Anything from you know, anything like an Airbnb is somebody's random or even a house to you know, full on vacation rental listings 12 bedroom houses overlooking the water. So very vast of difference of inventory. But I still didn't get into vacation rental business until until I bought a bar first investment with no no real intention to make any money off of it just something to do somewhere to eat and have fun for free or at cost. Yeah, sounds like fun. It was a lot of fun. You know, the BBS is a pretty epic training ground to move into vacation rental, you know, our businesses, stone margins, and the bar business has the bar business, the bar business margins are probably smaller and harder to conquer than being a property manager. Yeah, yeah. Especially in such a seasonal market, like where we were, you know, you could go you could go three or four days in the middle of June and see six people at your place and budgets, how do you? How do you take that responsibility to the balance sheet of the business or feeding other people's families? However you want to say that? Yeah, you just how do you discipline your business? How do you discipline your price structures to be able to handle, you know, to be able to handle 100% seasonality and then basically zero? But no, what are my buddies, still a good good personal friend of mine, business partner, kind of not not as much anymore as time has gone by. But he was walking, walking by the bar and goes, Hey, Ben, I know I owe you some money. Because of course, I've let people run tabs at the bar probably didn't help at the margins. It really did. It's kind of the bar business, the vacation rental business kind of kind of go on similar paths when you start because it starts off when you've got one two properties or you got 12 seats at a bar. It's it's fun. Yeah, it's really at the heart of our business. It's not that hard of an idea to to add listings online. Talk to guests. Be nice. clean a room. Yeah. Get another guest and that's really easy. Yeah, grime off row destinations kind of told me that story goes bad, but it's really, really hard to do at scale.

Annie Holcombe: 4:24

Yeah, yeah, that's really, really hard. We just are first of the month episode that aired in September, we talked to Simon Lehman. And he talked about profitability and kind of like, you know, how you have to have the strategy for profitability. And so I think that's something that crosses all types of businesses. It doesn't matter what business you're in, you have to really think about how are you going to be profitable and how are you going to like set yourself up for that scalability?

Ben Coleman: 4:51

Absolutely. And we kind of we kind of did that at the bar kind of at the same time in the vacation rental business but it's it's one thing to it's one thing to make you know to pay your Have $100,000 In our business or $50,000, whatever, whatever, whatever unit count you are, whatever the size of your business is, it's a whole nother, it's a whole nother ballgame. It's a whole nother level to actually build a business and to build true profitability, and then profitability into sustainability. Yeah, business is not just sellable the vision of the business, maybe the goal of the business is not to sell it, but it's to pass it down through generations, right? That's a totally different ballgame. When you get into our margins, our faith structures, and building actual building actual business equity and building actual business savings, and really having the structure in the business to be able to be adaptable and proactive in purchasing technology and purchasing, maybe business intelligence tools in your own business. Like Alex, I know y'all are working on some cool things right now. And I don't think that would be possible if it wasn't for really building a true actual business corporation. Absolutely. Yeah. You can't afford to have a CTO and a CMO and data scientists and all the other things. If you're just you know, running, you know, driving the business by No, no margins and not watching the finances. It's super important. And I think it's a very easy thing in our business to do because, yeah, it really doesn't matter what market you're in, like a year and a drive in market like, you know, Savannah, or Charleston, or you're in Myrtle Beach or Panama City, where it's more of a 12 week is kind of the heat or kind of Yeah, yeah. Either way, we're always seeing bookings coming in cash flow, you know, 80% 90% of the year, it's coming in. Yeah. Is that cash flow is not necessarily our money. Right, right. Exactly. Yeah. Yeah. No, yeah. to be good stewards of money. Wait, so you're okay. Your friend came by? Yes. Good story. I want to hear the rest of it. It's great. Yeah, he walks by, he owes me about probably about 20 503,000 pesos and say, let's call it $150. But he walks by and he goes, Hey, Ben, I'm coming to pay you today. I made $1,000. And I kind of just yelled back at him. Made $1,000 1000 pesos a little different. Yeah. Couldn't get my head around how you can make 1000 US dollars on this island. I mean, that's a lot of pesos. That's yeah, yeah. We back then. We weren't making $1,000 a week running a bar. Wow. Yeah. So you know, I tell them like, hey, come in, I'll buy you a buy one more beer and $1,000. And he was wearing his mother's three units. Right on the beach, a beautiful, beautiful building, right? Where the K Right, right, or the bay hits the Caribbean? Yeah, yeah. And I just still couldn't figure out if this was a real business or not, because like, Oh, God, your mom's giving you 15% of the rental revenue. She wanted to have you down here living with her in the winter. And it just, it didn't dawn on me even then that that was a real business until he kind of got into the owners pool, kind of an HOA association where you had, and down there, you know, we don't really have owner contracts, it's kind of shakes. And if we didn't have an under contract, it's probably not a not going to be fully enforceable anyway. But he got into that owners pool. And all of a sudden, I realized that they were giving us 50% of the money real quick. And I said, Okay, so this is a real business. And so we spent the next years kind of doing everything on Excel. We had no clue that this was an industry. We had no clue people like y'all existed. Yeah, kind of. We kind of joke at wheelhouse. You know, that. I feel like I've been in revenue management because I had no clue that was I didn't even know that was a thing. Yeah, I don't even know those two words that go together. Yeah, we were. But no, we spent the next years just building that business up, figuring out the margins of the business. But it was, it was it was quite a, it was quite a shift of anything I'd ever thought about travel. I'd ever thought about what actually goes into the back end of creating great guest experiences, creating great, creating great, great historic rental revenue for, for our clients assets. And we certainly grind it in a 1500 square foot apartment or two, three in the morning for probably two years. You know, it's a lot of manual work when you're scaling a business going from three to 30 or three to 40. And the first six months. Yeah, do it all on Excel. Yeah. Oh my gosh, yeah. I'm not even joking. Like, I mean, it's really funny. Your point about it, you said you had a real business all of a sudden, I've heard Roy tell that story about the early days at conda world back in the late 80s When When he moved down here to almost the exact same thing that they started everything on pen and paper and notepads and you know, keys on the wall and everything else and started with a few units and then started they got up to like 20 or 30. And you know, somebody else in the company literally said, you know, we've got a real business here. And then that kind of hit him like wow, and you know, we needed we needed to figure out how to how to manage this inventory and and that's when we got our first PMs in the early 90s I believe but yeah, it's amazing weather back then are now people If people still just stumble into vacation rentals, and they realize, okay, there's actually some pretty good, good money here. This is a good business to work in. But really interesting how you got your start with that? It is it was just it was the most random course of events that could have happened. Yeah, I think the real pivotal thing that was, I had tech companies before a tech company before I'd worked at it until, you know, I cut my teeth in sales selling Yellow Pages at 21. You know, having never actually used one except when my mom asked me to get pizza never used and to do that successfully. But I'd had about all the meetings that I'd ever want to go to. Yeah. Well, that we all kind of feel that way. I think we're really blessed and lucky in our industry that like, this gets to be my new these are my new meetings. I get to hang out. Yeah, yeah. Any. You know, there's so many wonderful and exceptional people in our, in our industry, you know, I mean, I get 30 minutes with Lance and Elaine Stitcher to that, like, what's more fun than Yeah, totally. Yeah, we have the best industry and the best industry family of people to

Annie Holcombe: 11:02

truly as a family.

Ben Coleman: 11:03

That's really is. Yeah, I've never seen a business like from an industry standpoint. Yeah. I mean, to be so shareable when it comes to business practices. And so and, and the content that we put out is so and it's why I love you all's podcast even though you don't have Wheelhouse a sponsor, we are sponsoring it at Rev and Research, we're still putting out such valuable information. And I love I love the mix of, of episodes that y'all do, because we get some that are geared, really toward operations are really toward I love the exploring episode. But you get such a mix of why people got in here, that really gives the rest of the industry, it kind of empowers them, they keep lets us keep going. Because as much fun as the business is being around the people and doing what we do. It's also very, very hard and taxing. Yeah, it is. And I think being able to hear from other people who are similar to you and have done similar things. It just it helps I mean, having that community is a big thing. And, you know, going back to you know, we are all very collaborative, and I think just as an industry we are the grip of are all of us are growth minded type of individual, you know that we all know that this is not a fixed mindset kind of game that there this, there's there's infinite possibilities for all of us to do well, in this industry. There's no shortage of of business and opportunity. So being open to sharing really just helps all of us and just how much the industry has grown collectively, in the last couple of years has come out of just understanding that concept. So it's a cool thing for sure. I think the coolest thing about our industry is it's got such a low barrier of entry. Yes, yeah. Yeah. Especially with with our market cap. I mean, I've read anything from 40 to 65 billion, when you start getting into those numbers to to literally be able to start a business with with some charm and a smile and knowing how to put something on Airbnb and VRBO is attractive. I think I see it on a weekly basis at wheelhouse talking to some of our smaller customers that are maybe in lease arbitrage are they've got a house in Myrtle Beach, and then they manage their two neighbors and talking to them. And they're and I it's been interesting this year to see their kind of see the light bulb go off in their head of how important managing revenue is at that at that smaller account. But I think that's what's very attractive about our industry. And it really attracts like minded people. Yeah.

Annie Holcombe: 13:21

And I think the great thing about the great thing about that is now is you go back, I would say, you know, a couple years prior to COVID. Those type of people weren't as prevalent because they're they didn't have access to the technology that could make it so much easier. So I think that because our industry is collaborative, there's these technology companies that have opened up their API's. And they've opened up their teams to be able to say, like, yeah, we can work with a guy that has one unit or two units. Because again, like Alex and I talked about, it's really important that we embrace these people as they come into the industry. And give them the tools and the education so that they can be a good player, and good participant in everything that we're doing. Because again, to your point, low barrier of entry can bring in a whole lot of people that just aren't playing by the rules. And not because they necessarily are trying to not play by the rules, but they just don't know.

Ben Coleman: 14:12

Mm hmm. Good point. And we I'll go ahead and tell you we had no clue there were any rules in this business when we?

Annie Holcombe: 14:20

Well, they were made up as we go along. So

Ben Coleman: 14:21

yeah, we were duplicating VRBO listings. We were we were back then that was kind of that was allowed, you know, there were there really weren't any. I think we

Annie Holcombe: 14:31

were all playing. We were all playing any available opportunity that came along and

Ben Coleman: 14:38

even flagged Terry White center episode that aired last week about how that's that's how he used to do VRBO and all the listing sites, you know, so he's the king of distribution so back then that time everybody did it. I thought that was what was so cool about Nashville so cool about dorm is I don't remember meeting more than maybe one who people that have you had 10 or 15 units and lease arbitrage? And I think, like eight to 10. Yeah. And I really wanted to hang out with them a little bit more than that than I got to. But I really made sure spend some time with them. Just because I think that as we talk about how, how, what the bulk of our inventory or the bulk of our industry is, you know, let's just say less than three units. The perfect I believe the professionalization of our industry will kind of start from that bottom up. Totally agree. Yeah. And that's, that's the challenge for sure. The challenge, I think that I think the more that we educate, the more the content that we get out, the more the more podcasts that we get out for people to listen to, is only going to is only going to be better and better. And I think the shocking thing meeting these meeting these people in lease arbitrage was number one saying about DARM and not necessarily like international or maybe a vrma spring event, sitting at a conference just dedicated to data and revenue was impressed. Yeah. Yeah. But they all said we need a price until and we need somebody to help us. Yep, exactly. And that's, that's where you come in. Right? Yeah, that's what we do. We, you know, we've got five people on staff, and we're probably running, you know, nine 40 hour weeks between the five of us and 75 80% of that time spent inside of Wheelhouse learning how they're not learning yet. They're still learning how to massage the model. Still, learning how to exploit demand spikes at scale has been a interesting task this year. Yeah. And so you take you took what you learn in Mexico, and you got to a point in Mexico first that that was up to what You know, about one or about two hundred? Okay, real estate 300? transactions happened so quick down there. You would have houses come in and out? Yeah, we under 365 days, they made me just three or four? That maybe I mean, we have people that would just rent it for they didn't want to be down there for Christmas and New Year's because it was too busy. Same thing. Yeah. You can rent my house. Those three weeks make us enough money to to be happy. So a pretty good sized portfolio.

Annie Holcombe: 16:57

Yeah. Yeah. managing, managing from, you know, from the distance with stuff in the US and going back and forth. Right.

Ben Coleman: 17:05

Yeah. Well, back then. I was there full time. You

Annie Holcombe: 17:06

work full time. Okay. Yeah,

Ben Coleman: 17:07

I was full time there for I was probably 80%. Full time down there for almost a decade. Okay. Yeah. run together. COVID doesn't help my year memory. Hey,

Annie Holcombe: 17:22

so you survived, you survived managing properties in Mexico, you survived the bar, you survived. I'm going to guess by conversations we've had the drug cartels in Mexico came back to the US

Ben Coleman: 17:35

common Yeah, we had had a couple

Annie Holcombe: 17:39

for you should we be watching

Ben Coleman: 17:43

very small run ends, they were more probably not even you know, wouldn't even be on our radar. But just just the ability to for our police officers down there, be able to do whatever you want, whatever moment got kind of scary to me. Also, you know, the business was was about as good as it was getting about as profitable as I knew how to make it. And in this process, you know, I didn't want to take any more meetings. And as I was in the, in the heart and the guts of the business, I started realizing there was a different there's two different ways to grow our revenue, you know, and I say it this way, horizontally, we add units, we add more nights that we can sell, or we can grow the revenue in the current inventory. Mm hmm. Yeah, we grow that revenue, we can make the business more profitable that way. And so I got just hooked on that side of the business. You know, I was kind of one of those I thought I figured it out to by just changing our prices on Airbnb and VRBO by dollar every day. Yeah. And I'll be honest, that really kind of almost was a little bit of the foundation of me getting into revenue management, and then eventually building our own rate tool inside the business that we that we sold for a little while. But it was it was what got me hooked on it was I can make them I can make a decision on price, no matter how elementary it was. But then see a result? Yeah, yeah, that to me was just so cool. And so when you're managing that many units, changing pricing for what you see or feeling the market got very, very taxing. You know, you go we ran the route of vas, we ran the route of everybody's just gonna do it two to three hours twice a week. And we're gonna get in there. And, you know, we used to grow. I used to buy beer for everybody, because it was gonna be a late night. And we get in there and yell rates back and forth. And how are we going to change this? And eventually, it just became, there's got to be a better way. Yeah, yeah, I got lucky enough to meet some people that knew understood what an API was at the time that understood how to build technology. And they started looking at what we were doing. I'm like, Man, this is so easy. Like, look, ya'll have an API, we can build out to it. We moved to a property management system. And and yeah, like we can actually change prices like on a computer. Yeah. I could grab my whole I could grab my whole 20 units that are all I can move prices up. 20%. Like, this is amazing. And it was really not until ResFest, I think in 2018 that I realized that this was an actual industry. Yeah, absolutely.

Annie Holcombe: 20:09

Yeah. While you're still relatively new at all this, I mean, you're you're kind of a newbie in relative terms to some of the people that we've talked to. Absolutely not

Ben Coleman: 20:17

new at it. But just coming into the professionals. Yeah, because he was doing it for so many years in Mexico, but didn't realize what he was doing.

Annie Holcombe: 20:26

He was doing Yeah, I mean, yeah, on some levels, you were doing all this stuff. And you didn't know this whole world existed. And so now you're like, full on into it. So yeah,

Ben Coleman: 20:33

it's been very, it's kind of gotten me more and more obsessed with the business. It's the industry, it's hard to keep my attention this long. I kind of described the vacation rental business as it's in a Rubik's cube that you're always kind of turned on and figured out. Yeah, let's turn away. change colors on here. Yeah, it's not all over again. Yeah. I think that that's really another reason that you see, you see people stick into this business for so long. Yeah. Yeah. Yeah. It's, there's, there's always on the new to learn for

Annie Holcombe: 21:06

sure. It's really great. If you have a short attention span, I can vouch for that. Yeah, because I do, I might never know one day is ever the same. Whether you're in management, or you're in a provider of some management companies uses, it's always changing.

Ben Coleman: 21:21

It's always changing. And then you're kind of coming over more into the consulting, you're kind of service side of the business. The way that people get this job done, well is the most is crazy to me. Yeah. So, you know, most businesses that I've been in bar business, especially, you get it done, right, that's great. Now, do it 10,000 times, right. It's all about replicating processes versus the difference in our industry. I remember Andrew said this on our episode, and I think he talked about it in his Wheelhouse presentation at DARM. That, you know, every property management company runs things differently. They can be on the same software and using the same systems, but they all do things a little bit differently. So it just depends on what the objectives of the business are. If you're trying to, you know, boost occupancy. If you're trying to you're not as worried about occupancy, but you're more worried about revenue and care of the units. There's just different ways of looking at how you run the business and how you optimize software and strategies. But how did you What came first and when you started Rev and Research, I know you work with Wheelhouse a lot did you start first with Wheelhouse and then realize that you wanted to be able to offer your consulting services to their clients or what did that Um, it really is a great it's actually a really funny story. look like? I'm just known LinkedIn one day. Oh, no. So yeah, the firt the answer to that first is I've been doing kind of revenue management consulting for a few people down in Destin just kind of in the kind of in the fringes still not knowing exactly how to get into the industry because it's not a it's not an easy industry just to walk into. And I think that's I think it's gotten a lot more welcoming in the in the past few years. Yeah, but not knowing anybody and then you know, really not understanding the technology landscape at that point. It was hard to grab clients you know, we didn't have an interface it was basically you just had to trust me. So I started off looking ultimately started the business just kind of just grinding just you know, making pretty decent money the input into it and just learning you know, learning that Destin market because I kind of you know, looking down there you could almost you could almost just work that market for the rest of your life and have no yeah, yes, a lot of inventory there. For sure. Oh, it's inventory down there. And so I was already doing that. And I'm just sitting on LinkedIn one day and I get a random message from a guy named Andrew Kitchell and like I said, you've got a pricing tool you do revenue management consulting like I'd love to have it like love to chat and so you know y'all know Andrew Well now too it's it's hard not to just write different like he's got I can't put my finger on it right I'm not exactly sure what he's talking about this wheelhouse thing yet telling the story about lyric and I'm trying to follow and and it was you know truly another kind of just very lucky thing that happened we the industry is Wheelhouse I think they hired John DeRoulet they were like 6090 Definitely not more than three months before they talked to me. And so yeah, I just kind of kept that conversation going they hadn't they hadn't raised money yet they didn't know if they're gonna be able to raise money. So he just asked if I would come on as contraact as kind of salesperson help help with the product some really with a no agenda kind of kind of deal there and we're gonna do it for six months and you know, we just got along so well. The culture Andrews created it Wheelhouse is so it's so special. I know. I knew I didn't want to leave it after six months. It really is. And we got to spend a lot of time with the whole team at darme and just you know, over the moon about everybody, they're just great team and I can see why you didn't leave. It's is a great group. And I think the innovation that they're doing and what they've got coming down the pipeline, this is just the beginning for them. It's super exciting to be able to, to watch it. It is, you know, we're still I still kind of tell Andrew this and a lot of it. I still feel like we're crawling. Yeah. Yeah. It's like a slow clap. So, Andrew invited me to go to DARM with him last year in Charleston. And so that was the first time I've seen anybody in person. That's when you right? Yeah, okay. Yeah, absolutely. And so then it comes to find out in our first dinner that he was not even the person that sent me that message on LinkedIn.

Annie Holcombe: 25:37

Oh it was it was okay. We love her good God. Oh, yeah. Really? Yeah. Again, goes back to Andrews. Just Andrews just like put together this team of truly like Rockstar, good people, smart, talented unafraid. Just driven. It's great.

Ben Coleman: 26:00

Absolutely. The way Andrew leads us and the way our tech team delivers on the product. Yeah, it's hell with that empowers the culture. It also empowers our work ethic. It empowers our drive. You know, I was so happy when Lance said when you're I love that. The what is a spotlight on exceptional property managers. Yeah. What a great name. What a great way to describe Lance and Elaine. Yeah, yeah. Oh, absolutely. Great.

Annie Holcombe: 26:26

Yeah, truely, great people. Yeah.

Ben Coleman: 26:27

If you're not, if you don't have a development team delivering on the product, you don't have people like Andrew, John, Matt Berg, some other people on our leadership team. Yeah, our leadership team wheelhouse. But if you don't have that core of the delivering on the product and vision, it's very hard to give the customer service that we do. Absolutely, yeah, yeah.

Annie Holcombe: 26:46

Yeah, product, I mean, just being in the technology side for, you know, for a number of years now. And having been, you know, at a at a large corporation, where technology was key, and, you know, key component of everything that happened, being able to iterate on things consistently, and deliver what the, you know, be one step ahead of what really the the client or the consumer is looking for, is so important that, you know, you're starting to see some of these technology providers, they're, they're lagging behind, because they just can't keep up with the innovation. And I think what, you know, what Andrew introduced at DARM. And what you guys are doing is going to really be a game changer in that you're giving that like, we're not the responsibility, but the access back to the property managers and not not ramming technology down to that down their throat and that, like you have to use this, this tool. And this is the way it needs to be done. There's a balance in it. And I think you guys have a really great understanding and pulse of what your customer wants, what the industry needs. And you drive that technology team and they deliver every step of the way.

Ben Coleman: 27:54

So well said Annie. Yeah, that was like that's

Annie Holcombe: 28:05

like a campaign speech. I'm running for.

Ben Coleman: 28:08

Yeah. No, that's so well said. I love how you said just jam technology down property managers throat. Yeah. Yeah.

Annie Holcombe: 28:17

Come from the property management side. And again, what was interesting is when you early on, you said that you had had the you came down to Destin and Alex and I have noticed this and I live here in the panhandle. So to me, it's always been this hot market. But when you look at it kind of step back. The Panhandle is like really an innovation hub. There has been some really is Yeah, brilliant minds and brilliant companies and brilliant innovations that have come out of here. So just for the purposes of that, we are claiming you even though you're from Birmingham, we're gonna

Ben Coleman: 28:48

you still have roots and Destin. So you'll Yeah, allow it. And you'll fit in there for sure. That really is the goal of what we want to do. We'll house and then and also what we want to do at Rev and Research is build support structures from the ground up. And I see that a lot on the consulting side is that what do you actually do? Do you know it's really fun being a consultant when you want to do anything? Right? Yeah, there's a lot you have to do. I mean,

Annie Holcombe: 29:17

if it doesn't feel like work, then yeah, it's great.

Ben Coleman: 29:20

It's one thing and consultancy, and it's like, oh, they just tell people what to do. And it's funny, I've kind of hear that bleeding into a lot of kind of a lot of our discovery calls a lot of our follow up calls with our clients. But our main goal, we really want to build a support structure around the business. We really want to build that support structure to give prop to give the pm or give the PMs revenue manager time back. In the same thing that we announced we want to build it from the ground up instead of building businesses and technology here and then making PMS adapt to it. Why can't we build it from the ground up and let the technology adapt to their business practices? Let let the revenue management foundation actually adapt to the current business practices, because it's very hard in our business. If you do revenue management, or even let's call it rate management, our this is how we manage rates one way, not only is the property manager is that his habit, is he stuck in that kind of rut of where he can't get out the homeowner. What? Right, right. Yeah, at least arbitrage where you can just change the revenue management strategy tonight, because we saw something different, because we have that homeowner accountability is the homeowners. Absolutely, yeah, no, I think you've got a great pulse on it. And that's one of the themes that they talked about at darme was the difference between revenue management and revenue performance. And I think that's, that is that next level that revenue management, yes, that is setting the rates that's pushing the rates out to next year, that's getting the rate periods and structures in place, but performance is taking it to that next level, and just the management takes a lot. But performance is that's kind of where you're more sharpening the pencil, and now looking at where can we, you know, lower rates that and also be able to raise rates that you at the end of the day, that homeowner is going to make far more money. And I think on the consulting side, you know, that's where I'm sure you have to do this with your clients, you know, you have to kind of help them explain these kinds of things to owners, because that can be a challenging thing. Lance talked about that, when, when we met with him that you know, at first, it's more of a learning curve of just how you explain that to your homeowners, you have to learn it first, then you have to explain it. But the important part of the process, it is and that's one thing that I really take pride in that we do. The two things you said that one with how do we explain it to homeowners? Yeah, so you know, when you take 100 120 property portfolio, and you're given all of that at one time, you're gonna get a lot of emails from your property, we're gonna get a lot of emails from a property manager, that phone is ringing 24/7 of their homeowners asking why is my rake this way. And so we utilize key data, we utilize warehouses market data on a daily basis to be in this goes back into that support structure of, hey, look, these are by the way, the rates are this way. Here's five bullet points for you to explain this to your owner. Oh, perfect. Yeah. And we really go and that to me, is that support structure? Because I'm the property manager not spending two hours trying to figure out exactly how to Yeah, yeah, I mean, I need to feel confident in what they're answering. And the property manager is not the one in most cases that is actually in charge of the revenue management. So for them to be able to speak to it can be challenging. Yeah. And then through that process, I'm just seeing so much growth in my clients knowledge of not just what revenue management is, but the language behind it. I think that's one thing that we're seeing flush out, flush out a lot Nashville, of we're getting the industry is starting to get some language behind what revenue management truly is. Yeah,

Annie Holcombe: 32:45

yeah. So I'll touch on that a little bit. And like DARM, like we were there, and there was a lot of conversations that went on and like So from your perspective, what were your big takeaways from the conference? I mean, Amy Hinote always does an incredible job of putting together you know, deep content, and bringing together the key innovators of the industry. So, from your perspective, as a revenue manager, consultant expert, I would dare say, you know, what, what did you take away from it?

Ben Coleman: 33:16

I'll tell you the most the thing that hit me the hardest, I think, was Terry Whyte. And please correct me if I'm saying this wrong, but dare I say that, you know, he will. Having founding fathers of the vacation rental business all in one place? Yeah. And I that's what I thought he said, and I'm gonna be making it out. He kind of he said that, you know, the founding fathers that the foundation of our industry is actually still being built. And we need to build on top of that well, for the next 30 to 50 years. And like, look, what we're doing what y'all are doing here. Y'all are building aren't building part of the foundation of our industry. Yeah. And we're still in the infancy, really. And all of us getting together with that, you know, when do you get that lineup of speakers, kind of undistracted and fully focused on what they're talking about for hours at a time. I think that's great. I think the thing that stuck out to me, though, is we're getting there, but we're still not there of being good at revenue management. Of understand. And I think a lot of that is understanding the foundation of it, that we are we're managing assets, not just listings. It's not, it's not just listings, it's not just homes, it's assets. And how do we do that? Well, and I heard I heard more than I've ever heard about organization and documenting. Yeah, in revenue management. And going from, you know, going from where we started the year to hiring people that Rev and Research to you basically continually accepting new clients. I learned real quick, this organization and documentation is real real, because revenue management is still founded, and maybe not found, but still a lot of that is intuition. And that's not very that's not scalable, right. Absolutely. I was confused about my organization and documentation. It is. Yeah. And I heard I kind of heard I hear this. And this is kind of also what I took away is, we don't know if we need a revenue manager or if we need technology. Yes, yeah, we know that we need one, we're not sure which one. And my response to that is, especially from a property management standpoint, and a profitability in the businesses start off with a tool. Yeah, start off with a tool become a super user of that to document your steps. So then as it as it grows, and if you still feel like you need a revenue manager, from day one, you can onboard that person into the business with with true with true SOPs in the business. Yeah, that really stuck out to me a lot. What what was that? What was two key takeaways?

Annie Holcombe: 35:47

I, you know, obviously, I didn't have any, like, huge takeaways Other than that, again, things are just moving at such a rapid pace. And, you know, to your point that, you know, we're in the infancy and we're adapting or adopting technology, you know, at a really rapid rate, we're understanding revenue management, we're understanding the needs of it, what what I do feel like I take away from the whole conversation is that vacation rentals has leapt past hotels, in terms of the adoption of these technologies, where revenue management and hotels has been around for a long time, and they have always taken the mantle of, they're the experts they know best. And I think that that's where a lot of the friction came in, is when people came over from the hotel side to tell vacation rentals. And I always use the analogy like, you know, in the south, people don't take kindly to strangers, telling them what to do, right? Business, a hotel business, those are strangers, they're not running their businesses they made for me personally, I started out in hotels, and then like, slowly moved into vacation rentals and been doing it for 25 years now. So I feel like that this is where I was meant to be. But there's so many people that come in from the hotel technology side, they use this tool, do it this way, this is the way it works. And we were like, No, we need to do our own thing. So go back to what COVID allowed everybody to do, where we were all panicking, the technology providers were able to take a breath, they were able to look at everything and say like, this is what our industry needs. And they took that 18 months of really scary time. And they developed some of the best tools in all of hospitality. And I really feel like we are in a much better position as vacation rentals than hotels are. Because our tools aren't antiquated. They're very new. They're there, they're there. They were built on a framework of adaptability and iteration. And so we can move quicker. And so you look at everything that was assembled that DARM is, that's the best of breed like we have some really great technology, and really great minds developing all of this stuff and leading revenue management overall, not just within vacation rentals. A great Yeah,

Ben Coleman: 37:49

I think I think exactly what you said that our ability to adapt technology is so is so much greater than the hotel space, and then on the on the vendor or on the business or the vendor side of it. If you're gonna come into our industry and think that you're just going to work 30 hours a week and put out some subpar products when Yeah, I mean, because we do innovate. I mean, what other industry just pushes products out and pushes updates out the way? We

Annie Holcombe: 38:14

did? Yeah, I don't I don't know. I mean, even you know, again, I go back to my time at Expedia. And they obviously had, you know, hundreds upon hundreds of different people within their tech teams. And then as they bought channels, they had to try to put, you know, again, the Jenga of all technology together, but they weren't putting out updates, like, like our industry is now granted, much bigger tech stack to worry about. But I do think that vacation rentals as a whole is, is being a lot more innovative than other in other industries, and specifically, you know, compared to hotels, and and I think that we will end up being the lead dog. It when you think of hospitality in five years, I really feel that.

Ben Coleman: 38:56

Yeah, I agree with that. And I think that one thing that I've noticed over the years, we've heard from our condo partners that are run more like hotel hotels, basically with the front desk on site management, you know how important it is for revenue and marketing departments to work together? And, you know, really, I think that is just kind of hitting vacation rentals as a theme within the last, you know, more recent years, even though the hotel technology, I don't think is has caught up to where we are, I think as a operational procedure of how the departments work together. I think hotels have that kind of streamline better than we do. So I think that that is one of my takeaways is just, you know, really figuring out how revenue and marketing can work together, better to optimize, you know, what's going out what promotions are, how you're seeing things ahead of time, so it's not too late. I mean, by the time in a lot of cases that we realized we've got a low revenue unit it's too late at that point. So Steve Milo had a great point in his episode on our show about you know, they do monthly reports on on the entire company to various reports to make sure that they're exactly where they need to Be and then that way, if you are falling behind, you've got time to make that up and move things around. So I think just being on top of that, and having good communication between those two departments is super important. Yeah, that's a lot. That's a lot. That's a statement there too. And as we've had lots of conversations about this mean, you just how does marketing and revenue work together? Yeah, yeah, go back to kind of what I really liked that I heard the arm, I think the foundation of revenue in week and Alex, I've kind of said it this way, how do we build a bridge between revenue management, or revenue and marketing? And I'm starting to think the foundation that bridges organization? Yep, it is? Oh, absolutely. Yeah, I think that as we see, and what we're seeing what I'm seeing with the volatility of markets, and kind of, let's call it a return, or kind of getting back to kind of the old, you know, getting back to a new normal of more 2019, Shore booking windows, I'm starting to see the portfolio segment themselves again, you're starting to see and you use the word Alex variance reports, starting to see a lot more of portfolios, follow the trends of 2019, where you've got some top heavy units, you've got a lot of your, you know, you're kind of dime a dozen condos, where you've got 50 condos and a building or 10 condos that are all the same in one building. You want to market those two completely differently. Are those completely different? The same way you want to manage the revenue? Completely different? Right, right. Yeah. And I think there's things that the hotel or onsite property management type of vacation all inventory have has has done that is, I don't know if it was strategic, but just the way that it works, I think it is, we could learn from it. One example of that would be if the if there's inventory, where it's 234 bedrooms, and they're all you know, decorated the same way, and they booked at the same rate, those homeowners, when they log into their owner's closet, they can't see one, they can't see their exact rates for the unit. And they can't see their exact bookings when it's booked because the unit is assigned at a check in. So I mean, they're doing it, they're running it like a hotel, but I imagine they have homeowners, their homeowners don't bother them nearly as much as ours do, because we've created such transparency. But I think transparency is good. But at the same time when we're trying to you know, when we know that we're relying now on technology to make these decisions, we need a little bit of a longer leash to be able to do that without somebody asking why we're making these decisions. So I Who knows where that'll go, but I think there's there's some validity and how they've set that up. There. There definitely isn't. I think that there's certainly some validity to that. And I think that as long as us as an industry, as long as the technology as long as technology vendor and technology partners, keep with that transparent theme. Yeah, being able to give real value and show that value to homeowners. Yeah, I think that's where we really start separating ourselves from the hotel space, because all of a sudden, if we keep doing that, we keep being transparent and say, Look, we're doing the best we can, for every guest that comes into your room to rent that for the most money we can the most times out of the year to vent to, you know, to minimize wear and tear. You know, when we do that, and we bring transparency, we bring value and we showed prove that value. All of a sudden, it's a lot easier to get, you know, to talk to talk to a homeowner about renovating, renovating his property. Yeah, yeah. Yeah, absolutely. Building pools, and built and being able to build the guest experience from the ground up, I think is an interesting foundation of our industry. It's not talked about very much. Yeah, yeah, I agree with that completely.

Annie Holcombe: 43:39

So where do you see, just like off the DARM thing? Like, where do you see like for the rest of this year? What do you think is going to happen? In terms of, I guess, maybe people stepping in and using more technology, because it does seem like again, people are coming came off a high, some are adapting back to go to 2019. But there are some people that entered the space at the high end, you know, they entered the space when everything was going gangbusters. And now they're like, Oh my God, what do I need to do? Like, feels like those are the people that we need to outreach to and say like, Okay, here's these tools, you know, do you think that there's going to be a more rapid adoption for maybe those lower volume pieces of business? Like, you know, again, the the two unit guys the three unit guys,

Ben Coleman: 44:22

that's, that's, yeah, absolutely. That's I heard that t DARM multiple times. Somebody with six or eight units is like, we've got to get a technical a tech stack going and I'm like, in my head. I'm like, Man, when I had six units, I don't even know the word take what the word tech stack was. Yeah, exactly. Yeah, that's what you're talking about a tech stack. Let's just see if you're profitable. Yeah, like hell. Yeah. Yeah. You see a lot of adoption with that. You see those new obviously this is just a business, just business. One of the one that you see those people move, being able to move faster in the technology as well, to being able to and what I do see on it on a on a daily basis is not only how quickly they can kind of adapt out into technology. But how quickly they are to try them all?

Annie Holcombe: 45:03

Yeah, yeah. Yeah.

Ben Coleman: 45:05

I've met with multiple people that have been on four different PMS. And they've been well, yeah, it's a lot easier to switch at that point. Yeah. And I think that's that's a good point that they've, they have the flexibility to try a bunch of them. And it's not going to completely bogged down their business, but the way that it would if you've got hundreds of units, but yeah, well, even

Annie Holcombe: 45:23

Terry Whyte, hesaid, you know, he said, he was like, Maybe I shouldn't say this. But he has accounts with all of the different pricing tools. And he's like, any given day, he's got all for all the window. Yeah. Understands that each one has something that he likes. And so yeah, if anybody's listening, if you could take all of them together and take the Yeah, exactly. But I think, to your point, when you're smaller, you are able to kind of dip your toe in the water in everything and figure out like, Okay, if I dream big, if I scale up, and I've got my goal of 200 units, what does that look like on this particular piece of software?

Ben Coleman: 45:57

No, yeah. 100% of how do you do that same thing of like taking all four pricing tools, putting them into one pretty package. from a technology standpoint, how do you actually do that? How do you actually create a usable platform? Right? Yeah. People, like you know that the person with three units and the person with 1000 units can use at the same time? Yeah, that's very difficult. I think I think our industry does a good job of that. But I think the other interesting thing in our industry for the rest of the year is, what is what how many people from these arbitrage come to international? Because those are the ones that can go I met with a lady from Texas. She had she had 12 units, that DARM and now she has 35. Yeah, wow. Oh, my gosh.

Annie Holcombe: 46:39

I feel like there's a bubble there with lease arbitrage. That's, to me is a dangerous, dangerous way to go. But I know people,

Ben Coleman: 46:47

people are doing it. So especially heading into a recession to that that works in 2021 or early 2022. And things were all flying high. But I think anytime there's an economic downturn, there's a risk there. But we'll see next year, we'll find out. It'll be also interesting to see how the markets respond to Yeah, yeah, terms, like midterms in November, yeah, November, we've got a lot going on, we've got a new cycle. That's not great. You know, that's not great for us as an industry all the time. It'll be interesting. I haven't seen markets as volatile, since you know, well, you know, around 2018 2019. Even though those were great years, there were still some very, very, very, very interesting seasonality going on. And what we're going through the end of the year is just, you know, what proactiveness is going to when being on putting some diligence in. And you know, honestly, if you're if you're a peon that doesn't really do revenue management, you just kind of set your rates and you kind of respond to what you're feeling. You know, if you want to take a dive into the deep end, you know, get very aggressive for occupancy in October and November and see those decisions play out so that you can build some confidence with little risk moving into 2023, which, you know, it's been a while since it's been this unknown in our industry of what travel is going to look like next year. Yeah, I think revenue and marketing could not be more important, and heading into 2023. Because with less demand, we're all going to have to do more and just be very scrappy, and just be on top of all the numbers to be able to get, you know, anywhere close to where we've been these last couple of years. Yeah, less demand more supply makes it very, very difficult. And I'll tell you one thing that I see Alex and I see this is our summer, we offer our services, you know, we grow, we grind, we come you know, we run various reports, we call them a different name, but we run reports every every day, every week, we put some projections, we built some things into them. But I forgot what I was gonna say they're sorry, on my dad's desk, just went off there. But no, but marketing and revenues. Sorry, I'm just a little bit out of my comfort zone. No worries. But know how revenue and marketing work together, we grind over our services we come up with, you know, one of our tag lines is taking aggressive goals and producing tangible results. So we know and I, people that mix marketing and revenue that have a true, let's just say kind of a little bit of communication there. It really when you start doing revenue management, you start seeing how portfolios interact, and you get ahead and being able to kind of send out some marketing documentation to did some maybe specific unit counts or specific buildings, it really is gas on the fire revenue management. They really work hand in hand. And I mean, I'm telling you yet, you know, I'm talking one 2x And I'm talking about a lot of Yeah, yeah, they something that just takes some time to build from the marketing standpoint. Yeah,

Annie Holcombe: 49:37

I think I think back to revenue management being an art form, you know, and marketing is art and marketing is a lot of instinctual behavior and marketing is a lot of creativity and revenue management has a lot of that as well. And I think for a long time, people just assumed revenue management was just about the numbers and marketing was just about the you know, the feeling of it all and getting it out. but they are so intertwined and they're their artworks that have to be together kind of like always think of like, like, you know, skaters, like skating pairs, you know, dance teams and skate, they have to be in sync together to make it all work.

Ben Coleman: 50:14

Yeah, absolutely agree. Absolutely agree. Well, so Ben, we want to have you back. And I don't think we could go on forever on this topic. But we want to have you back to dive into some more details on revenue management practices and strategies. And so we're gonna have, we're gonna have you back. We're gonna do some Bee bopping with Ben on the regular going forward, and we're gonna get some questions from our listeners about different things that they'd like you to come out on and explain. So we're really excited for that. But I think this was a great introduction to who you are and what you've brought to the space so far, and we look forward to having you back. But thank you for being here today. This was a blast. I knew it would be fun. I just, once again, I mean, the industry is so cool to get to get to do this on, as you said, on the reg with two of my favorite people on the planet is going to be so fun. And we'll tell some funny stories. And we'll get we'll get some anecdotes mixed in with some data. Yeah, yeah. Making revenue management fun again. Really fun. Yeah. Yeah,

Annie Holcombe: 51:18

thank you for being our friend. First and foremost. Thank you for being a supporter of what Alex and I are doing and just being a good steward of the industry. You're just, you're such a great asset to all of us. Yeah, absolutely.

Ben Coleman: 51:31

Absolutely. About if anybody wants to contact you, what's the easiest way for them to get in touch? You don't even go to Revandresearch.com, just R e, v and research.com or you can just shoot me an email at Ben @useWheelhouse.com

Alex Husner: 51:43

Okay, great. Well put that in our show notes. And until next time, thank you so much for being here. And thank you to everyone for tuning in. If you would like to get in touch with Annie and I, you can go to AlexandAnniepodcast.com and we will chat with you next time. Thanks, everybody.