This is a great time to take a look at our distribution strategy and evaluate what changed in our channel mix year-over-year. Are you happy with your distribution matrix and the process involved? Have you taken a deep dive into each channel and analyzed the costs and benefits of each? Was there a certain channel that outperformed? Was there a channel that fell short? How did this affect your channel mix ratios? Were you able to execute revenue management strategies and take advantage of promotions on each channel? At Casiola, when the pandemic hit, we were quick to leverage what was working on each channel and what was not. Whether it was a cancellation policy change or a channel promotion, we evaluated what was driving bookings and focused our energy on the levers we could pull to increase them. It forced us to look at our metrics on a granular level, focus on what brought in the volume, and thin out what did not.
However, this was a double-edged sword that created a problem for us over time. By forcing a disproportion in our distribution, we put too many eggs in one basket. It was necessary at the time to find bookings wherever we could, but when the dust settled, it was imperative to move back to a healthier channel mix. Too much leverage in any one channel creates vulnerabilities because having too much third-party influence over your revenue simply is viciously dangerous territory. It was important to create a healthier mix. As long as we maintained a healthy ratio, we could put effort into growing each channel more. With a combination of our pricing software and channel manager, we were able to throttle back bookings in the overactive channel but not cut them off. This afforded other channels access to our inventory the other was previously taking up.
Did you have a channel that outperformed the others in your market? Which ones did not, and why do you think that is? Was there a strategy that you used that had an impact on a certain channel? How do you reestablish a healthy balance when the scales tip too far to one channel? What do you consider a healthy balance and why? These are all questions to reflect on.
Data Usage We could fill an entire VRM Intel Magazine issue discussing data alone. After all, data is the cornerstone of revenue management. Our industry’s challenge is not with the lack of data, but with using it effectively, determining what is quality data and what is not, translating that data across multiple platforms, and having systems that are on the same page about metric calculations. I would simply implore you to find out where your data comes from. If someone provides you with data, where are they getting it from? Are they transparent about the sources? How granular are the metrics?
For example, when looking at the technology platforms you use for determining competitive (comp) sets and benchmarks, really find out whether you are comparing apples to apples. Perhaps the identical seven-bedroom home down the street is in your comp set, but it has a pool and yours does not. Is it truly a comp? Comps are most 80
VRM Intel Magazine | Summer 2021
certainly determined by more than data alone, but it’s important to understand what data is being used nonetheless.
If you use pricing system and they make a change in ADR for a certain time period, how do you know what has and has not been already calculated? Is there transparency? Or maybe they are only using market data to calculate your pricing, but you are already outperforming the market. Understanding what is being used will help you make better-informed decisions. Perhaps the most important question is whether you can access this data outside the platform and access it with ease. I recently heard this referred to as “data liberation,” which could not be more accurate. In a world of so many technological layers, we need to have a constant: our data.
In some scenarios you might not need to liberate your data because it has no use outside the platform. However, what if you are using more than one platform to make informed pricing decisions? Perhaps you use one tool for benchmarking, one tool for internal pacing, and another tool to implement pricing changes. It becomes daunting really quickly. What if that platform doesn’t have the ability to perform a function on its UI, but you know it’s fairly simple to do in Excel? How easy is this process? Pro Tip: First determine the quality of this data and then determine if it will be held hostage.
Looking Forward This has been an interesting year with many curveballs. We were forced to face issues we didn’t expect. Processes involving everything from operations to technology to strategy were tested almost to the breaking point. Many of us had to develop entirely new processes or find creative ways to optimize our current ones. Tons of good came out of such a stressful time; it forced evolution in many ways. However, we are not out of the woods. Not even close.
It’s no secret the vacation rental market has become a dominant vertical in the travel sector during this time. Travelers have come to see STRs not just as a viable option for lodging, but in some cases, a preferable one. However, a substantial increase in market share for one vertical almost conclusively means a decrease for another. We will have a target on our backs, and we must continue to evolve both individually as companies and as an entire industry.
We must collaborate, educate, network, develop, and strategize, and we must not stop learning. I’m looking forward to seeing you at DARM and sharing our battle stories and experiences! Emily is a UCF alumna with over seven years of revenue management experience specifically in the shortterm vacation rental industry. With 300+ properties in central Florida, along with a new expansion to Aruba, Emily heads the Revenue and Listing Management Department for Casiola Vacation homes. Her department focuses on optimizing the company's revenue by leveraging technology, working with OTA partnerships, and developing reliable metrics for quick and reliable decision making.