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Owners Who Kill The Messenger. And Managers who help them.

By William May
Published: 07/01/09 Topics: Comments: 0

The stinging effect on vacation rentals and vacation rental managers through out the US due to today's economy is having a effects that none of us can do anything about.

The loss of demand is bad enough but now some managers are receiving those proverbial calls from owners who want to kill the messenger instead of rewarding those operators who are busting their butts to make things happen. For top managers it is a time to capitalize on the opportunities but I do hope you are one of the ethical groups out there who refuses to do so with the old Peter-Paul scheme.

This newsletter is a wake-up call to managers to watch out for the scoundrels who will misuse current owners just to steal new ones. And to owners about how to do themselves a favor.

Lack of Demand

If fewer travelers in total are going on vacation then surely vacation rental revenue will also suffer. Traveler preference for vacation rentals may still be increasing as it has for a decade at least. It might even be increasing as guests look to cheaper ways to travel and realize what a bargain they get renting a home instead of a hotel room. More space, fewer restaurant bills and the opportunity to split the costs among more friends.

But recent drops in pre-booking demand and current month occupancy in virtually every geographic market must be out pacing any perceived growth in vacation rental preference. The numbers don't lie. From vacation rentals and rent-direct owners every member calling VRA has reported a drop.

Some see as little as 10 to 20%. Tourism in Hawaii is reporting an over all deficit of 30-40% and there are rumors in some Florida destinations of being hammered by 70% drop offs. Yikes that hurts.

Taking Action

So what should the industry and individual practitioners be doing right now, immediately to retain business or stay in business? The laundry list must include cutting costs of course but that is a double edge sword. All businesses should only spend what is needed to provide a good product. Being opulent is seldom a good tactic.

One seemingly smart move is really just the opposite. In every recession there are businesses that cut advertising because doing so is easy, immediate and visible. If past recessions are an indication (and why wouldn't they be?) dropping out of public view is the beginning of the end.

That is more true now because consumers use the internet to daily to determine if you are still in business. Some go directly to your busy website but most revert to finding you gain through search engine and website directories. If you aren't there, they don't find you in the first place and probably not on return.

In another newsletter we'll ask experts from everywhere there strategies on the cost cutting side of things. For now, however, let's focus on retaining or increasing revenue.

Get Your Game On

I must admit I quit playing basketball at the tender age of 50. I miss it, I do. From it I learned many things. First, if you aren't talented it still feels good to play. Second, the game is all about being ready to play and pouring it on.

If you play basketball in various gyms you also learn an important rule - known when not to enter the game. Unless you are Michael Jordan, Kobe Bryant or some other superstar there may always be someone in the place who will enjoy kicking your posterior.

Today the economy is the opponent and we must all decide whether we stay in the game or throw in the towel. If you are a gamer, then the next decision is to decide how hard you are going to play.

Here are some things my rental management company has done to up our game. We're increased our reservation hours and are open seven days a week. Plus someone always has the mobile in their pocket for reservations. (We already have a 24-7 emergency operator for other matters). We have built faster, more efficient software. Think one-second quotes and fully signed, sealed and done reservations in 60 seconds or less.

We have asked our creative staff to reshoot photos of units that needed them. Non-reservation staff are in the call-queue to attempt to grab every phone call with a live person, no matter how busy the phones (Yes the phones still get busy but they get cold sometimes too.)

Our part-time media buyer is now full time. The ad budget has been doubled and with staff that triples our costs. We have crated a software driven automated ad placement system and helped started the industries first multiple listing service (MLS) for vacation rentals, mostly so we could use it.

We call every phone or email inquiry lead three times before setting them aside for fresher calls. The on-site staff are spending more time double checking properties, attending to issues and following up on details.

These are all good things we were doing anyway. We just decided to go into hyper mode.

John Wooden was the Coach of UCLA for a great many years. He won ten NCAA championships with his closest competitor no where near. I had the great opportunity have a long breakfast with him years ago, after hearing him speak for four straight hours to a group of kids.

In all his years of coaching, Coach Wooden ran a full-court press 75% of the time. For those of you not basketball fans, that means his players contested every pass from one end of the court to the other. This is terribly tiring and no player really wants to do it. But players, you see, like to win. And wining is what Coach Wooden taught.

There are great players and smart players and skilled players. But the player who wants to win the most usually does so. The one who will put in hours at practice, live and breathe the sport and always be one step ahead of the competitor.

This economy is every rental manager's chance to win a championship. If they have the stomach for it. And if they go at it hard enough.

Killing The Messenger

Our owners know this. We try to find time to keep them posted of the situation and try not to sugar coat the economy. Taking the time to report takes time away from serving them so it is a delicate balance.

It is satisfying to find so many who understand the plight and appreciate our extra energy and effort. But we can't expect that with everyone. Owners are like bosses. There are good ones, lazy ones and the kind - those who don't care about the details they only want results. Unfortunately the economy is going to make some want the impossible. And that is tough to deliver.


I guess the only thing that surprises me in this economic meltdown is when I see other managers taking devious steps to steal owners away from other managers. Almost always competition is good. We have had numerous owners come to us from other managers asking if we can do more.

It would be tempting to inflate the truth and make pie-in-the-sky projections. Having been in three professional service industries over the years I have been offered this easy out before. But easy outs seldom are.

Dear Owners

So if you are a property owner and wondering if your manager is up to the task of meeting this catastrophe head on, how should you go about evaluating the work your manager does?

First, realize there are no magic elixirs. No manager has an unlimited number of guest inquiries that they can just casually throw your way. Whether they have 10, 100 or 1,000 homes they must market relentlessly to fill them and more so in this economy.

Another manger tells the store of losing a long time landlord for whom they had increased business about 10% every year including in 2008. The owner switched to a new manager who is open just 6 hours a day for reservations, has an ugly website and no on-line booking engine - but it does have an online calendar which is very revealing.

It has only been 3 months and the new manager has secured absolutely no bookings. Nada.

Beware of managers who rob Peter to pay Paul. One recent caller told the story of losing one of her condo owners to another manager and two weeks later signing back another condo in same complex who was leaving that other manager.

The reason? It seems some current bookings had mysteriously canceled at the same time that the first owner was getting bookings. Same complex. Same dates.

It is obvious and it is not ethical. The other manager moved guests from an old owner to a new one to get the new property. Luckily, in this case, the owner figured it out and jumped shipped. But I worry many owners are falling for the ploy.

Is The Grass Greener?

We have heard the click "The grass is always greener on the other side of the fence." We all know it is never true. But asking questions is particularly important now-a-days.

The surest way to determine if your current manager is well underway to protecting your rental interest is to become knowledgeable. Ask detailed questions and be a smart savvy boss. Evaluate the effort but not the results because right now no one can guarantee you anything. In fact, walk quickly away form any manager who tries to BS you with promises.

Instead, you should want to know these facts:

- Has your manager increased or decreased operating hours?

- Have they hired or laid off sales people?

- Are they working longer hours or letting dejection take its toll?

- Has advertising and marketing been increased decisively?

- Are they undertaking new websites, photos, panoramas and more?

- Do they invest heavily in the internet or are their websites second-class and antiquated?

Making subjective decisions takes time. It is emotionally satisfying to fire the messenger. But don't lose the investment you have already made in your current manager.

If they are innovating, cooperating and hustling you have a keeper. Musical chairs won't get you anywhere.

Author: William May, MayPartners Advertising
Blog #: 0117 – 07/01/09

Comments: 0

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