October 19, 2017
VRMA National 2017: What We Learned
Now that we are back from Orlando, and the largest VRMA National Conference in history, I have had some time to reflect on my time at the conference, and what I learned while I was there. As the takeaways that most stood out in my mind are applicable to many others in the space, I thought it worth sharing for those who were not able to attend, or those who did and are still interested in hearing one person’s perspective. So what did I learn?
The Future Is Bright For Professional Managers
The first two keynote presentations of the conference came from the two giants of the space: Airbnb and HomeAway. Nathan Blecharczyk, Co-Founder and Chief Strategy Officer of Airbnb, opened the proceedings in Orlando. His session in particular stood out for two main reasons:
- His presence. Only a few short years ago, Airbnb did not even bother to have a presence at all at the conference being far more focused on its urban markets, and peer-to-peer “hosts.” Sending an actual Co-Founder of the company all the way to Orlando signaled that Airbnb is taking the VRMA, and professional managers, seriously.
- The content of his presentation. There was of course the requisite founding myth story to be told, but the real meat of the talk was focused on the importance of professional managers in providing an unparalleled experience to guests, and the tools Airbnb is now providing to better assist managers in doing this. There was an explicit recognition that this was not where Airbnb started, and thus its product has been lacking to date on this front, but that this is, and will be changing going forward.
Not to be outdone, the other 800-pound gorilla in the room, HomeAway, sent its own Chief Commercial Officer to speak later on the same day. The presentation was much more “brass tacks” in its focus than that of Nate, which is to be expected given the different ethos of the two companies and presenters involved. However, the substance was largely similar. Just as at RezFest, Jeff focused his talk on Market Maker and the other tools and features HomeAway was making available to managers to assist them in running and upskilling their businesses. For the company that got its real start with VRBO and a focus on Rent By Owner, this focus for new product development was telling in terms of where they see the future of the industry (and their own bottom line).
The Future Will Not Be Bright For Everyone
The keynote presentation the following day, however, was the proverbial other shoe dropping. While the future would be bright for some professional managers, it was clear this did not hold true for all who hold that title. This point was driven home in two main ways.
The first became apparent during a panel discussion hosted by Simon Lehmann, the Godfather of vacation rentals. With him on stage were former VRMA President Ben Edwards, VRMA Board Member and owner of Taylor-Made Deep Creek Vacations & Sales, Jodi Taylor Refosco, and Vacation Rental Pros owner, and crowd favorite, Steve Milo. The session unsurprisingly got off to a bang, with Simon having to remind the panelists that this was “not just an OTA-bashing session.” As the conversation progressed, though, Simon posed to the panelists a final question: in this world of rapid technological advancement, is there a place in the future for professional managers?
One could be forgiven for assuming that at a conference like the VRMA, which is essentially a celebration of all things professional vacation rental management, the answer would be an immediate and resounding: YES! However, the panelists on stage were far more circumspect, and hedged in their answers. “Yes…for some managers,” was the answer across the board. The panelists acknowledged the value professional managers can deliver when they do their jobs properly, but also pointed out that calling yourself a “professional” did not necessarily make it so. In this world of rapid technological advances and increased competition, much more was going to be required of managers in order to succeed, and ultimately not everyone would make the cut.
The second thing that happened during the keynote had nothing to do with anyone sitting on stage at that time. Rather, it was an article Bloomberg published during the talk about the most recent round of financing closed by Vacasa that had members of the audience buzzing. With a fresh $103.5 Million in the bank, people could not help but think something was now “different” in the world of vacation rental management.
Now, don’t get me wrong. Huge amounts of money have poured into the space over the years, with the largest sums going to marketplaces and platforms like Airbnb and HomeAway. And while even professional managers like Oasis, TurnKey, and Sonder have raised tens of millions of dollars, this was the first 9-figure single round of financing ever for a professional manager. The point being that as the audience listened to the panelists on stage talk about increased competition and the difficult road to survival, it became immediately apparent that just trying to compete was going to be far more expensive going forward.
But What About The Experience
The final major takeaway from the conference was a theme that pervaded both of Simon Lehmann’s presentations of PhoCusWright data, as well as the closing keynote from Leonard Brody. It had to do with why people choose to book and stay in vacation rentals, and what they are actually buying when they do so. This point had three main themes.
First, people are rarely looking for a “vacation rental,” or an “Airbnb,” or even a “hotel.” Leonard Brody in his talk about The Great Rewrite, a book he is publishing with Forbes, said it best: these people are looking for a “bed.” They need a place to sleep, and these arbitrary labels we may put on them are not only unhelpful, but in many cases can even be counterproductive. Whether for work or pleasure, in a group or on their own, for a single night or several weeks, these people are looking for the physical space that best fits their needs for that situation and context. The experience you create and provide can be augmented by your service, but what ultimately determines your brand, what in essence your brand is, is the physical space itself. Never forget that.
Second, when people are looking for this place to sleep, they care about three main things:
- Value. This does not mean they look for the cheapest option. They look for the best value. The balance of what they are paying versus what they get.
- Location. Depending on the context of the stay, the right location for that person in that moment may vary.
- Experience. What does your place to sleep offer that others do not, or perhaps cannot? Deliver on this trifecta, and you have a winning formula.
The third takeaway, and surprise for me personally, was that despite the objective data demonstrating the importance of Experience for guests, when Simon asked his panelists where they were focusing their attention within their businesses, the responses were consistently “we are focused on reducing costs and finding efficiencies.”
To me, this obsession with cost demonstrated a misunderstanding of the Value guests are seeking, and leads managers down a dangerous path. We are now at a point of incredible potential for professional managers in a space that is growing in size, visibility, and popularity. With this increased attention, though, comes increased competition. If the takeaway for your company is that this competition should just be a race to the bottom on cost and price, then this will be an opportunity missed.
Now is the time to create and deliver unique and delightful guest experiences. Do that, and the rest will take care of itself.