What you should know about VRMA 2018 and Vacation Rentals Trends

Attending the VRMA European Conference is an experience that every property manager in Europe should go through. More than 400 people came together in Paris to create a new attendance record.

This was the third VRMA conference that I have been to, and each time I come back with fresh ideas, projects, new knowledge about our industry and stronger relationships. As Your.Rentals was an event sponsor this year, I feel the need to share some of this experience with those who did not attend. Here are some of my key takeaways!

Available Technologies

The number of companies offering services to property managers seem to have multiplied this year – including property management software, channel managers, pricing management, operations software, insurance, etc.  Each of these companies offer more options for property managers to improve their efficiency and processes. The whole market is growing, and becoming more complicated to navigate for smaller property managers.

Google is entering the ring to compete with OTAs directly from a guest’s initial search. The introduction of Smart Home Systems, gadgets and software looking to automate some services and improve the guest experience bringing new big players in the game such as Amazon on this war to “own the guest”. The use and availability of technology is changing the rules completely and evolving the market in giant steps. Almost every presentation mentioned the words “Artificial Intelligence” which promises to help improve the earnings of property managers through smarter pricing to maximise occupancy and profits.

Organisation against rental regulation and bans

The pursuit to democratise the private accommodation industry and to put up a fight to ever stricter local regulations was another common theme.  Many of you probably have felt the pressure from your local and national authorities to register you properties and learn new ways to declare and pay taxes.

There is a quest to unite and organise managers in Europe and in the world, providing them with tools and arguments to engage in the political arena and exert some influence on policymakers. If you are interested in this you can visit this VRMA webpage for more information or read about how you can participate using social media in this article by Greg Holcomb.

European market trends

The European market is forecast to be worth €45B in 2020, having reached around €34B in 2015.  Almost half of the booking revenue generated in 2016 in Europe through rentals was sourced from online bookings. The OTAs (Online Travel Agencies), and Airbnb are leading the online bookings in France, Italy, Spain, Germany and U.K.

Some of the most relevant key facts presented:

  • Average rental stays are becoming shorter, as a consequence of the growth of city rentals market and less strict booking rules across the sector. At Your.Rentals, we’ve see the number of bookings grow dramatically while average stay has fallen from slightly less than 7 nights to around 5 nights – while average nightly rates have grown around 20%.
  • Travellers are starting to consider private accommodation as a serious alternative to hotels – and much of the growth in bookings is in urban areas. This is a direct consequence of OTAs offering more and more private accommodation in their portfolios, a higher percentage of accommodation available for Instant Booking, and the guest experience becoming more reliable.
  • The “rental by owner” segment is growing compared to “professionally managed”: more than 50% of European private accommodations are rented out by the owner directly – compared to less than 40% in 2010. This trend is forecast to continue growing and is understandable given the growing access to simple property management software such as Your.Rentals and the new generation of “young urban entrepreneurs”. However, we believe that tools such as Your.Rentals help smaller local property management companies thrive and grow their business – and we have the case studies to prove it!
  • One of the largest challenges to the industry in the next 5 years is supply growth – while private rental accommodation supply is growing at more than 27% per year in urban areas, growth in “Leisure/Non-urban” areas is sluggish at around 2% (while demand from guests is much higher9. That is a clear opportunity for property managers outside of urban areas to be aggressive about taking on new inventory.

New vs Older generations of owners

At several sessions during the VRMA, it was clear that holiday rental owners and managers are divided into 2 generations with very different attributes that can help to understand the way the offer is distributed.

  1. There is a younger generation motivated by a entrepreneurship income as well as interacting with new people, renting their own primary home apartments or flats, for a minimum length of stay of 2-3 nights, as shared spaces in an urban context.
  2. There is a more experienced segment of owners who rent out their second homes, cottages, villas or condos located in more leisure-holiday locations, renting for a minimum length of stay of 4-5 nights with the purpose to cover their costs, upkeep their properties and earn some extra income.

Both of these segments need to choose how to manage their properties: either by using a professional property management company, or managing themselves.

  • Owners who choose to use a property management company, do so mainly because they trust these companies to bring more bookings, or they don’t have the time or experience to take care of the many aspects of managing a vacation rental.
  • Owners who decide to self-manage prefer to do so in order to have major control of the rates and their guests, interact with them and save the management company fees.

There are also hybrid set-ups, where owners want to retain some control over the guests who stay in their property and have a say on who stays in their property, while allowing a property manager to fill in the gaps. If this sounds familiar to you as either a property manager or an owner, you need to be very clear about:

  • Who is managing listings in each channel.
  • Ensuring that you share the same calendar – which is updated in real time – to remove double bookings.
  • A clear acceptable guest profile (if that is important to you) so that booking requests can be accepted by either party.
  • Who collects guest reviews that can be used to improve booking conversion over time.

Your.Rentals is working on some simple tools that allow the owner or Property manager to both have access to the same calendar and also for both parties to be notified of booking requests and confirmed bookings – stay tuned.

These are a few of the trends and important issues I’ve found interesting to share.

I would like to invite you to share as well your experiences or questions on these or any other subjects regarding the VRMA European Conference. Please don’t be shy let me know your thoughts.

VRMA Official Sponsors in Paris

We are very proud to announce that Your Rentals will be sponsoring the 2018 VRMA Europe Conference, and we want to invite you all to join us in Paris from 4 to 6 of March.

We are heading to Paris for the 2018 VRMA European Conference, 4-6 March 2018 at Le Méridien Etoile. Register online and get ready to discover the latest business strategies and trends impacting the European holiday rental market.

Highlights of this year’s conference include:

  • High-level networking opportunities to build connections and share your expertise with fellow holiday rental professionals.
  • In-depth education sessions tailored for you. Whether you are new to the industry or a seasoned executive, benefit from key takeaways, and best practices, and lessons learned.
  • Dedicated time with suppliers to explore the latest innovations in technology and the resources you need to grow your business.

While in Paris, visit our display table to learn more about Your.Rentals.

VRMA 2018 European Conference
4-6 March l Le Méridien Etoile l Paris, France
Learn More

The European Conference delivers premier business and educational tools to support holiday rental professionals and deliver superior guest and homeowner experiences. Attendees will participate in high-level networking sessions, in-depth educational sessions, and dedicated time with leading industry suppliers to learn how to take their business to the next level.

Answering your feedback about Your.Rentals

Answering your feedback about Your.Rentals

– a post from Your.Rentals CEO, Andrew Martyn

I’d like to share some great news with you. Since we launched Your.Rentals in November 2016, we’ve exceeded our own expectations and yesterday passed 10,000 registered property managers!  I’d like to personally thank each property manager for the time you have invested in getting started with Your.Rentals, and look forward to building a bright future together.

You may wonder why this is important to you. I believe it is important because the more traction Your.Rentals has in the market, the easier our progress is in connecting new channels and growing faster. As an early user of Your.Rentals, you’ve taken a leap of faith and now it’s time for the payback.

Over the past 2 weeks, we invited some of our property managers to give us feedback via a short survey (thanks to the more than 500 property managers who responded!), and I’d like to share and respond to some of the key findings.

You’ve asked for some things from us, and we also have some tips to help each of you become more successful in using our platform.

It’s important to remember that Your.Rentals is a “performance-based” vacation rental management and distribution platform. Your.Rentals is different because we do not charge monthly subscription fees like most of our competitors. We get paid when you get paid. We see this as the perfect balance to a business relationship and it drives our company philosophy.

Your feedback and our response

Feedback 1: Some of you are unsure about setting prices, fees and payout calculations

Some property managers have said they are confused about how to set prices and how our fees are applied to calculate your payouts.

This is a top priority issue for us – as we want to ensure you never need to turn down a booking due to incorrect rates or unexpected payout amounts.

We’ve made a new page on our website to explain this more clearly, and also to help you understand why we charge the fees that we do. I would encourage every property manager to take a few moments to read this to ensure that your prices are set to achieve the payouts you expect.

We also introduced some features earlier in 2017 to show you both the guest and payout amounts where you set your rates, and show your nightly rates in your calendar. Last month we released our Listing Preview feature where you can select dates and we’ll show you the pricing and payout calculations so it’s easy to double-check.  Use these tools and we are sure that you’ll be able to set your rates correctly. If you do need any help, please get in touch with our support team.

 

Feedback 2: You want to be able to see your listing live in sales channels

We agree that seeing your listings live in channels will give you confidence that Your.Rentals is working the way you expect, and allow you to double check for any errors in your content, rates or availability.

You can now find a View listing button in our Channel manager so that you can to click to see your listing in that channel. Not all sales channels provide us with the direct links to your property (for example HotelBeds, HomeToGo etc), however where possible we are providing you with a link.

 

Feedback 3: You want more sales channels

We aim to perfect the performance of each sales channel before introducing new ones – so that we’re able to deliver correct bookings to you. Over the first half of the year, we’ve focused on ensuring that key channels are working well.

Now we’ve turned our attention to releasing new sales channels, and I’m happy to announce our distribution is live to Agoda, HotelBeds and Only-Apartments – with a significant number of new channels planned to be connected before the end of the year.

Due to some of our property managers having too high cancellation rates (read more about that here), some of the new channels such as Agoda will be invitation only to begin with. We’ll be letting you know by email when a new channel is connected, and what you need to do to ensure your listing is connected.

 

Feedback 4: You want more bookings!

As Your.Rentals is a performance-based platform (we earn money when you get bookings) our goals are completely aligned with you on this.

We acknowledge that not all property managers have received their first booking via Your.Rentals. With our new channels and some new features coming in the next few months, each week you have a greater potential to receive bookings.

There are a few things that you can do to increase your success:

  1. Ensure that your calendars and rates are up to date – that will ensure your listings remain online, and that each booking is correct. It will also mean that you will be automatically included in our invitation-only channels. You can use the Listing Preview feature to check how the guest sees your availability and rates, and double check the payout you’d receive for bookings on different dates.
  2. Where possible activate Instant Booking – this will expand the number of channels available to you. You should be able to activate Instant Booking if you control your calendar and ensure that it is up to date. For Property Managers who share a calendar with the owner, you can agree to update from a shared calendar so that both of you have the correct availability.
  3. Take note of your Listing Quality Score, and seek to bring it above 90/100. You can find the most important tips for improving your Listing Quality Score on the Dashboard page.

 

We fully understand that for some property managers, these issues have caused Your.Rentals to slip down your “priority list” and you haven’t invested the time to update your availability and rates. I hope that you can see that we are working hard to generate bookings for every property manager to ensure we are at the top of your priority list.

To finish off, I want to thank you for trusting Your.Rentals with your business and encourage you to act upon some of the points in this post. We rely on you to create a successful platform.

If you have any comments, feedback or ideas, please use the comment feature below to which I will personally respond. If you’d like some help getting your account perfected – reach out to our fantastic support team either by email or LiveChat on our website.

 

Best wishes
Andrew Martyn
CEO – Your.Rentals

Increase your booking conversion rate

Every property manager would like to increase the rate of converting enquiries and requests to bookings (and we’d like to help you).

There are a lot of improvements you can make in how you deal with requests, your response times and your style of communicating with guests that can enhance your conversion rate.

However, as a business analyst crunching the data at Your.Rentals, I can share with you a simple truth: the first step to increasing your conversion rate is by reducing the number of requests you need to turn down due to wrong rates or availability.

In our first year at Your.Rentals, we’ve grown bookings significantly in each month – however, in some periods we have experienced higher than necessary rates of declined requests and cancelled bookings.   We have a target to keep cancellations below the industry average of 8% because this means that our relationships with sales channels grows stronger, and your listings get preferred placement in their search results. That is good for everyone.

 

The impact of cancelling a booking  

When a property manager using Your.Rentals cancels a booking, it has far-reaching consequences.

  1. It impacts the guest – they have paid for a booking, and it can take several days for them to receive their refund. They also need to find replacement accommodation – their time has been wasted and they are financially inconvenienced.
  2. It impacts the Sales Channel – their reputation suffers when bookings are cancelled, and their support team needs to spend the ime to help their customer find alternative accommodation.
  3. It impacts Your.Rentals – for each cancelled booking, we pay the bank/credit card fees to accept and then refund the payment, we pay a penalty fee to the Sales channel (and sometimes the difference between the original booking cost and replacement booking cost), our support team spends time helping the guest find replacement accommodation.
  4. It impacts you – the property manager who cancelled who will pay a penalty fee for the cancellation. In fact, the penalty fee in many cases does not cover Your.Rentals costs for the cancelled booking.
  5. It impacts every other property manager in Your.Rentals because cancellations reduce our rating in Sales channels – leading to lower search positioning.

As you can see, cancellations have a wide-ranging impact on everyone in the Your.Rentals community, which is why our team takes it so seriously. Our team has a part in ensuring that this issue does not have a negative impact on our community. We’ve been doing a lot of research into understanding why bookings are cancelled and developed a model for predicting when a booking will be cancelled.

So how can you avoid cancellations?  

The top two reasons for cancellations (by a long way) are “dates already booked” and “rates are not correct”. This is why we implemented the following policies during 2017:

  • Calendars must be updated either via iCal sync or manually every 14 days (even if you have no new bookings).
  • Seasonal rates must be set at least 12 months in advance (or calendars closed where you haven’t finalised future rates).

Listings which do not adhere to these policy rules will be paused until the issue is resolved. We know that these policies are strict, and sometimes well-intentioned property managers are caught out – this is unfortunate for those who are using our platform correctly.  If your listing has been paused and you don’t feel it should have been, please contact our support team who will assist you. We have also introduced new features to make it easier to ensure your availability and rates are correct:

  • Email alerts if your calendar has not been updated.
  • Email alerts if your seasonal rates have not been set for the next 12 months.
  • Nightly rates in your calendar – your rates for each day are shown in your calendar.
  • Close calendar – allowing you to close the calendar when you haven’t set your future rates.
  • Listing Preview – allowing you to see your listing as a guest would, check availability and rates, and check your payout amounts.
  • View Listing in sales channels – as a final check, you can view your listing in supported sales channels and double check that your rates and availability show as you expected.

With your help, we can easily maintain our target of less than 8% cancelled bookings. Would you like to know more? Contact our fantastic support team to help get your rates and availability correct. If you’d like to know more specifics about our research, you’re welcome to leave your question or comments below.

Christina Martens Business Project Manager

2017 Vacation Rental Industry trends: What you need to know to beat the competition

2017 Vacation Rental Industry trends: What you need to know to beat the competition

Editorial by Andrew Martyn,
CEO Your.Rentals

We want to play a role in the success of every property manager or owner using Your.Rentals, which is why I’d like to share with you some of the fast evolving changes in the vacation rentals industry.  The trends discussed in this article are most likely already having a major impact on your business, and I believe that if you are able to adapt your business around them you will be better placed to beat the competition in your area.

I was fortunate enough to attend the VRMA European conference in Amsterdam last week to discuss with Property Managers, OTA’s and software vendors what is going on in the vacation rentals industry.

Our Calendar Fresh Project

Through this article, I want to explain why at Your.Rentals we strongly encourage Instant Bookable properties, and why we have a policy to not support property managers who run an “open calendar”. Our policy stance is designed to help property managers take advantage of the evolving trends which I will discuss below.

I’d like to discuss this in the context of a campaign we are running at the moment to help Your.Rentals property managers and owners keep their availability Calendars up to date.

As part of this campaign, our support team yesterday started contacting property managers with online listings (both Instant Booking and Request Booking) who have the following issues with their availability calendars:

  1. Property Managers who are running a totally open calendar (ie. they never update their calendar).
  2. Property Managers who have not updated the calendar for a long time.
  3. Property Managers who are not using our iCal sync to automatically keep their calendars updated.
  4. iCal syncs that are not retrieving any bookings (ie. there may be an error).

While it was a relatively low number of Property Managers contacted, we have been overwhelmed by the response – both in a positive and negative way. We’ve seen many Property Managers update their calendars – thanks to you for that!  We’ve also had some replies from property managers who do not believe that it is important to keep their calendars updated. If you think that I’m wrong about this, please take the time to read below, and I hope that I’ll convince you.

I would also like to say that we realise that due to the “restart” of Your.Rentals in late 2016, many property managers are yet to feel the results of using Your.Rentals – we understand you. Our team has been working extremely hard since December to bring channels online, and I hope you feel that we have kept you updated about this process. It is precisely because we have a lot of channels coming online now, that we decided to take the initiative to help some of you get your calendars updated, so we can together provide a great experience to guests and help you secure more bookings.

Here are some of the major trends impacting our industry, which I believe every property manager should be aware of, and have a plan to optimise their business around.

Key Trends 2017:

1. Vacation rentals are not just vacation rentals any more

Over the past few years there has been a strong growth in urban short-term rentals, which has fuelled a massive expansion of what we’ve traditionally called the vacation rentals industry.  One proposal is to rename our accommodation segment “alternative accommodation“. This is important because it provides a broader context for us to understand how our guests are changing, and how they experience the product/service that we provide.

Urban rentals are opening up our “alternative accommodation” to younger Guests. Younger guests tend to travel more to city destinations and often don’t yet have families – therefore they don’t have the same need to relax on vacation as I do! These younger guests are growing up fast. And as they start to have families, they are crossing over into more traditional vacation rental accommodation.

Based upon their use of sites like Airbnb and Booking.com to book accommodation, guests have learned to expect that they can book instantly, as they do for flights and hotels. They don’t have the patience to enquire and negotiate with property managers and owners to hear if a property is available. Channels have realised this and have pressured property managers and owners to accept “instant bookings”. They are doing this because they saw a trend of guests making 10+ enquiries per booking – guests do not have the time and patience to make 5 or 10 enquiries one after another to find an available property. This is a horrible guest experience.

As a property manager or owner, this impacts you!  You may find that today you spend a lot more time answering “dead” requests than you did 5 years ago, and if you don’t answer immediately, the opportunity is gone. Perhaps more importantly, if your property is not listed as “Instant booking” on OTA channels, it will be de-prioritized in search results, and many guests will skip over it.

→ You should ensure that your availability is accurate in all sales channels, and that you enable Instant Booking if you are able to. By taking care of these things you will have a higher conversion rate, and spend less time dealing with enquiries.

2. More and more bookings are coming through OTA channels

I think all property managers can feel the rise of the OTA channels. It is impossible for smaller sites and companies to compete with their marketing budgets, their large choice of accommodation options and customer bases.

Over the past few years, the OTA channels have been on a steep learning curve to understand how to sell vacation rental bookings – and have often done so by acquisition of vacation rental specialists. For example Expedia’s acquisition of HomeAway, TripAdvisor’s acquisitions of HolidayLettings, Flipkey and HouseTrip, and Priceline’s focus on their Booking.com and Agoda businesses.

We can see a fast maturation of the way OTA channels market and sell vacation rental bookings. The new age is here.

Based upon the vacation rentals industry data, in 2012 OTA channels accounted for around 35% of online bookings – a majority of bookings were made directly with property managers or owners. By 2016, this share has grown to 63%, and is forecast to grow to 75% in 2018.

→ You need to be in OTA channels, and to take advantage of most channels your properties need to be instantly bookable.

3. Supply of vacation rentals is growing quickly, but so is demand

As mentioned previously, the massive marketing done by Airbnb, HomeAway, Booking.com and others over the past few years has opened up the “alternative accommodation” segment to more and more travellers. Latest estimates show the US market size grow from $23 billion in 2012, to $29 billion in 2015, and is forecast to reach $37 billion in 2018.  Phocuswright will publish new data for the European market in the coming months which is expected to show an even larger market size.

At the same time, supply of “alternative accommodation” is growing just as quickly – particularly in urban areas. In Amsterdam, there are 29,000 hotel rooms, and in 2017 alternative accommodation supply has reached 27,000 bedrooms!  While in urban areas we are competing with hotels, the hotel chains are not reporting any down-turn in demand yet, which can only mean that demand is growing in line with supply.

→ Focus on your competitive advantages and make sure your distribution is strong – the demand is there but your property needs to stand out from the crowd.

4. More bookings are made within a month of travel

Another key trend presented is that the share of bookings made close to arrival is growing, presenting you with a challenge but also an opportunity.  Due to the increase in supply of instant bookable properties available in OTA channels, guests are able to plan their accommodation later than ever before.

In 2012, the percent of trips booked within a month of travel was 12% of total bookings. In 2016, that number has grown to 52%. 

Last minute bookings are more difficult to manage because there is more stress and time pressure both on the guest and the property manager (who is likely already checking in arrivals). However in terms of helping your occupancy rates grow, a focus on last minute bookings is key.

→ To grow your share of last minute bookings it is critical to ensure that your availability is up to date and that your pricing and discount strategy presents great deals to guests. The closer to the travel date, the more likely it is that a guest will choose an instantly bookable property.

5. Average length of stay is decreasing – more bookings are for shorter stays

We are also seeing that the average length of stay is decreasing.  A case study during the conference from a US property manager showed that by embracing OTA channels and relaxing booking rules, they are seeing a large growth in the number of bookings and occupancy rates with 121% increase in revenue from OTA bookings and 181% increase in the number of bookings (ie. more bookings of a lower average stay).

→ If you are sure of filling your peak season with stricter booking rules and minimum stay, then by all means stick with that – we all want to 100% occupancy in peak season. Outside of peak season, use much more flexible booking rules with shorter minimum stay to boost occupancy – the OTA channels work well to find off-peak bookings.

6. Local service is still the major part of the product

While the trends above are to do with supply, demand and the booking process, the quality of your rental, amenities and the local service that you provide is still the key to the Guest’s experience – and whether they will return.

A lot of discussion during the VRMA conference was about how to deal with shorter length of stay in profitable ways, and the use of technology to help provide a better guest experience – such as electronic locks and better messaging between property managers and guests.

We plan to offer partnerships and integrations with some of the leading suppliers of such services in the future to enable you to connect and manage these through Your.Rentals.

→ Ensure that you have good operations in place for having real-time availability updates without doing any extra work. When your share of online instant bookings via OTA channels grows, and you have confidence in your calendar accuracy, you’ll be able to spend more time on ensuring your product and service is a step ahead of the competition.

Summary

The trends discussed in this article are most likely already having a major impact on your business. Perhaps you have found ways to take advantage of such trends. Our commitment to you is that by working with Your.Rentals, we will allow you to simplify distribution to both major OTA’s and also more niche local vacation rentals sites. The team at Your.Rentals is 100% focused on expanding our online channels and we’ll keep you up to date with new channel launches.

At Your.Rentals, we don’t support property managers who wish to run an “open calendar”. Given all the trends above, our focus on guest experience and the requirements of the channels we work with, that’s a decision we believe in. High rates of requests being declined and cancelled bookings impact all of the property managers using Your.Rentals, so we have a strict position on this.

If you would like to discuss strategies and operational plans for getting your calendars up to date with less effort, or are nervous about moving to Online Booking, please reach out to our Support team here. We are looking forward to playing an increasing role in your distribution and bookings in the years to come.