By Heather Weiermann, NAVIS
The Economics of Really Knowing Your Vacation Rental Guests
W
e put many price tags on guests. How much is a guest worth? How much did that guest cost? When guests become names with a dollar sign attached, we lose sight of hospitality—and of human nature—but, ironically, it is by understanding human nature that we’re able to increase the value of the dollar sign. The human brain is bigger than other animals with similar body sizes because we are social creatures. We exist to have relationships of all different kinds—from a nod and a smile to a very best friend. Scientists know that humans with more social connections are happier. In fact, economists have put a price tag on relationships to demonstrate this, and the act of volunteering weekly is equivalent to increasing your annual income from $20,000 to $75,000. Having a friend you see most days is like earning $100,000 per year. This is how important connection is. And it’s important to guests, too. Of course, most guests don’t want to hang out and chat all afternoon, but they do want to feel welcome. Like they belong. They will do business with people they like—because, again, we are fundamentally social creatures.
When asked about their guest database, many vacation rental managers (VRMs) will reply with a number (e.g., our database has 45,000 names). This means very little because it doesn’t matter how many guest names are in a database. What matters is the depth of the relationship with those guests. How much information is there about those 45,000 guests? The more information about the guest that’s included signifies that a connection was made. An agent or a front desk manager was listening and engaging and walked away with knowledge of a person, a guest. So how does understanding the guest increase guest value? Creating relationships increases conversions for all the reasons above, but it also offers the opportunity to truly personalize guest outreach. To better understand your guests, find out their interests—whether they have children or are traveling with friends, whether they prefer a big kitchen for gatherings or intimate cabins, when and how they like to travel—this is where personalization happens.
For instance, if the agent documents the inquiry fully and knows that a guest who didn’t book on the first call is traveling with two daughters, wants to attend the sandcastle-building event the weekend before school starts, and is coming from a town 125 miles away, this information can be used to personalize an outbound call. During such a call, an agent could offer the family’s ideal-sized property on the appropriate weekend with access to the beach so the family can walk to the event rather than hassle with parking. A call of this kind creates trust that your staff understands what the guest is looking for, and this trust is where a lifetime guest can begin. Let’s look at the economics. If a property has 6,750 unbooked leads and begins a personalized outbound sales program with a 2 percent conversion rate, this equates to 135 new outbound bookings.
With an average stay value of $2,800, an outbound sales program would yield $378,000.
6,750 unbooked leads
x 2% conversion rate = 135 new bookings
x $2,800 average stay value
= $378,000 in untapped revenues Further, the level of guest information that was collected above allows for true segmentation, which opens the door to automated, personalized marketing. With NAVIS Reach LifeCycle, VRMs can segment based on a depth of information to create email marketing programs that actually speak to what the guest cares about. What if you knew that a return guest tends to start shopping in November but books a summer vacation for her family of twelve in January—after the holidays—and she always wants a big outdoor space with seating for large family dinners? Then an email can be crafted that will speak to that guest’s interests and needs, going much further than name personalization and instead becoming truly effective marketing. While the point is that we have to go beyond dollar signs when we think about and engage with guests in order to grow real relationships, the benefit is that, when we do this, we substantially increase the opportunity for revenue. The trick is to not only be aware of the economics but also care about more than just the bottom line, to genuinely care about serving the guest, and to connect and create an experience that is just right for their needs. To explore the value of going deeper with guest personalization and find out how much money is waiting in your pipeline, try out NAVIS’s Competitive Edge Calculator. https://www.thenavisway.com/calculator VRM Intel Magazine | Fall 2016
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