the expected value provided, and the market is the sole determining factor, not an algorithm that is tweaked by the expected value programmed into it. Pro tip: those value indicators never point in your direction.
The fact remains that your ability to provide customer excellence is the best outcome for the guests and the true value of your business. YOU are the best price guaranteed based on the value you deliver or until you give that away to an algorithm.
What Is the Value of Your “Supply”? Going forward, it is vital that business owners understand what type of supply they represent. Factors will include inventory, location, seasonality, traffic patterns, quality services, and the commitment to brand. For those who do not have any brand representation and/or lack the technology or ability to adapt, the choice will be made by default; expect your distribution costs to increase.
If you have read any of my past articles or attended my presentations, you are familiar with this mantra: If you give up control of your brand, guest communications, or merchant of record, you will find it more expensive to operate your business. Two out of the three are now in place. If your brand has been around for years and your strategy is still based on hope—or if you think just increasing your rates will solve the problem—then guess again. If the OTA’s strategy is to drive down your rates (and control them) while your acquisition costs continue to increase, does it not make sense to have a counter strategy in place? Don’t succumb to the law of holes. If you find yourself in a hole, stop digging. For those who do understand how their supply fits into the value chain, the future is bright. The advantages of offering a valued product come from the unique value your brand offers the traveler. It does not matter how many properties you have—travelers will find you.
You Are Not the OTA’s Customer: You Are the Product Complaining about OTAs does nothing but waste valuable time and energy. Have a plan in place for alternative distribution of your
properties. Look to leverage social media and develop unique content that travelers will engage with. Your owners are banking (literally) that you figure this out. You can either invest in your brand or the OTA’s brand. From a business perspective, there is mutual benefit to having your owners’ fiduciary responsibilities aligned with those of your brand. Your owners understand the value you create by giving them predictability. This forward domino effect is what sets the stage for both internal (talent acquisition) and external (owner acquisition) growth.
It comes down to working with the OTAs while developing a retention strategy to use once you get them in-house. The strategy should include delivering on customer excellence while educating the guests on the value of booking directly. Watch any commercial today and you will see hotels communicating these same values. Vacation rentals are a far more intimate experience, and that is one of your many competitive advantages.
Key Takeaways The road ahead will be challenging in 2018. Stay engaged and look for opportunities to better position your brand in the new year. Last, but not least, understand the value of your vacation rental professional community at both local and regional levels. They are no longer your competitors; they are your allies, and there is power in numbers. Hotels do a great job of competing with their neighbors, and doing so pays handsome dividends. Wishing you all a very successful 2018 campaign!
Vince Perez's expertise spans across multiple disciplines in the hospitality and technology fields. Prior to his technology ventures, Vince served in executive leadership roles in operations, sales and marketing for Japan Airlines, Nikko Hotels and Hyatt Corporation. Vince is a partner in California-based Beach House Rentals. Perez founded Fetch My Guest, an Intelligent Marketing Automation Platform that increases direct bookings through higher conversions while dramatically reducing marketing costs.
VRM Intel Magazine | Winter 2018
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