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Big Business Falters - Lodging Newsletter October 31, 2020
By Wm, May
Published: 10/31/20 Topics: Lodging Newsletter, Newspaper, Vacation Rental Management, Vacation Rentals Comments: 1
Defining success in any business should be judged in more ways than just by whether a company makes a profit.
Vacation rentals have been around by forever. Delegates rented private homes when they traveled to Philadelphia to meet and draft the Declaration of Independence in 1776. Although our first vacation rental operation started in 1964, many of us here today began about 20 years ago.
But, boy, have we noticed fast moving changes in those two quick decades. Houses are better and often bigger. There are far more of them. Rental rates have gone steadily upward. The number of people renting homes has climbed up steadily every year, including during the 2008 recession. But, guests are demanding more amenities and instant service.
After a huge drop during the pandemic, even more travelers discovered private home rentals and that will surely expand the industry, even after that deadly virus is dead and gone. (Yes, it will happen.)
But the growth has converted our little 'cottage industry' into one assaulted by corporate behemoths. They bring greater visibility, but fail to judge their success by the things that count most - quality, personal satisfaction and integrity.
In dealing with the Seattle Times newspaper decades ago, we learned what it was like to deal with powerful bullies who get too big for their britches. They charged top dollar, had embarrassing journalism, provided low-ball quality, and were smug and difficult to deal with.
Today, they beg people to advertise and plead with the world to give them another chance.
Now, the same is happening with all the large vacation rental lodging advertising websites. They promise too much, deliver too little, brag in never-ending PR releases, and reveal their quest for profit at the expense of doing 'great work.'
Just a decades ago, a little known "Couch Surfing" business figured out that horning in on vacation rental advertising was more profitable than selling room stays on the cheap. Now, AirBnB is a giant.
Five years ago Expedia purchased the HomeAway company, operator of VRBO website, for 4 billion dollars. Then, within 60 days began tacking on a "guest service fee" that produced $400 million in bottom line profitability with the wave of a software wand.
In recent years, several management corporations raked in hundreds of millions in capital to buy up local vacation rental management companies in their quest to consolidate a fragmented industry. Their greedy system pays corporate officers and bankers big bucks, while short changing housekeepers and other workers. That resulted in thousands of disparaging on-line reviews. And all because they put profit ahead of performance.
AirBnB laid off 5,000 people and stopped answering phones, but saw fit to unilaterally change cancellation policies for managers based on hidden terms in their online small print.
VRBO fired thousands of people, stopped answering phones making it impossible for managers to get help. Just today it took 12 phone calls for them to admit that the assigned representative was canned long ago and no one knew who replaced them.
Booking.com has faltered. TripAdvisor is flailing with ever-changing tactics and policies.
Just a month after the pandemic ramped up, one of those corporate management firms simply closed its doors and disappeared. Another laid off 90% of their staff and had to borrow $100 million to stay afloat.
This summer, we received dozens of calls from guests of the corporate managers, asking us how to reach them, after being kept on hold for hours. They knew we were not part of those goofballs, but were desperate for help. We did what we could, but had to say, "Rent from our local stable management company to avoid those problems."
HUMBLE & KIND
This report is not to praise ourselves. Everyone has been affected by the Pandemic. But we never stopped answering phones. Our always smiling team members cleaned homes rigorously. Our software engineers quickly created responsive tools. And everyone worked overtime, while other companies cowered.
We must admit that less important questions take longer, while we work to serve guests, manage homes and maximize income for owners.
We are happy that our team members continued to make a living, but at the end of the day, we get our satisfaction by knowing everyone here performed above and beyond.
We appreciate the kind words from clients and guests who see our added burden. And, if you self-manage your own home, call us to earn more. If you use another manager, call us to get the kind of service they fail to deliver.
Author: Wm, May, Vortex Managers
Blog #: 0795 – 10/31/20
Sponsor: Vortex Organization – We train quality people to help run unique Inns, Resorts and Vacation Rental Management companies, in an industry that has been a webby net of technology combined with good old fashioned property, guest and owner services. – VortexManagers.com
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