A "Brief" rundown

I was recently asked by a vacation rental owner to give a brief synopsis of what it is that My Rental Ready does. As you can see by the length of the email that followed I overshot "brief" by a mile. What can I say, I'm passionate about it. In any case here is a portion of that email:

"My Rental Ready is a management company that has recognized the changes in travel trends of those that frequent the Panama City Beach destination. This consumer isn’t necessarily looking for a “hotel” they are looking for a “vacation rental”. These customers are interested in larger spaces, fewer intrusions and the creature comforts of a home. This isn’t news, obviously, given the sheer number of condominiums constructed over the course of the last 7 years vs. the number of branded hotels that have been erected. What was once a fantastic way for developers to sell their projects at a premium has served to change the expectations of the traveler in general forever. The evidence of this transition can be seen in the success of companies like VRBO.com and its parent company Homeaway.com. These are sites that allowed owners of individual vacation rentals, like you, to compete with national hotel brands. Individual vacation rental owners who were once relegated to utilizing a real estate firm or an onsite management company were given a place in the market. Homeaway has been so successful that they were able to place an ad during the Super Bowl earlier this year! (here’s a link if you missed it: http://www.youtube.com/watch?v=k24N5DQ_XaY)
Nonetheless, all of that was simply to put into perspective the fact that travelers and their vacation expectations are changing. This means that marketing channels that have traditionally been used by branded hotels and management companies have started to open up for individual owners. Management companies have had to try to combat this intrusion into their market share by flooding the vacation rental owner sites with their own product in an effort to keep their inventory. So this begs the question: Why do you continue to share a percentage of your revenue with your management company if they are merely using the same channels that you ,an individual owner, could use yourself for a fraction of the cost? Some of that can be answered easily enough. Many owners don’t have the time to deal with all of the nuances of successfully marketing and managing a vacation rental property. Up until a few short years ago it made more sense to be lumped into a pool of like units and managed as a hotel would be because all of the marketing channels were designed for a hotel environment. As I already mentioned that has changed at the customer level but has it changed at the management level? The answer is no. Management companies don’t know how to change their model in an effort to address this fact. What’s worse, there really is no incentive to change. Even if an owner decides to list their unit with a competing management company the model will be the same. Owners will be charged a percentage of gross revenue and all of the other little charges that seem to make their way onto the bill. This is the universal reality of vacation rental management.
At My Rental Ready we have found a better way. We have realized that the only reason sweeping changes to the industry haven’t taken place thus far is most often attributed to greed. The same management company that is charging you 35% for the maintenance, marketing and monetization of your unit is charging you at least twice for that privilege. That bears explanation. Let’s say there is a guest in your unit that complains that the light bulbs are out in the bathroom. Maintenance will happily respond and replace the bulbs on your behalf and will charge you the cost of the replacement plus an up-charge as well as a delivery fee. If you have a rental guest departing from your unit today that guest will be paying a departure cleaning charge. You won’t see any of that money but the guest is paying it as part of their rent. Those are small examples really and are part of any management company’s contract. This is the cost of doing business and charging for these things is justifiable within reason. We even charge guests for housekeeping departure cleans and service calls. The problem is that you are paying a 35% management fee to have that sort of stuff managed and the management company is up-charging the service so that they can realize a profit!
You may go ahead and let that type of charging slide because in the grand scheme of things those charges are minor and the real benefit from the management company is in their ability to market your unit. Unfortunately, that is also a false misconception. If your management company is marketing your property with Expedia, Hotwire, Travelocity, Bookit or any other channel manager you are losing at least 25% of the total vacation value in commissions. If “Guest A” books your unit on Bookit.com and pays $1,000.00 for the week, Bookit is keeping a minimum of $250.00 for their trouble. That leaves you to compete with the management company for the remaining $750.00 and as you know, they are going to get their $262.50 plus all the a fore mentioned fees. How is it that their 35% commission isn’t adjusted to reflect this reality?
My Rental Ready, charges a flat annual fee for our services. Our goal is to make a reasonable amount from each unit and enable the owners to make more money. This way you’ll renew with us every year! Our total cost to manage your property is $3,500...."
So much for brief.

Agents of change

  There are a number of factors that have created a state of flux in the vacation rental world. As anyone who is involved at any level and for any length of time can attest things are changing. Real estate bubbles, oil spills and inventory gluts are only the proverbial tip of the iceberg when it comes to the real agents of change in the industry. The last thing owner/investors want is a race to the bottom. How else are you going to deal with that looming debt service?
  There are few elements on earth that are as fragile as a the delicate sensibilities of the American vacationer. Options abound for us and the only thing separating us and our ultimate destination is the direction that the brain's electric current decides to travel. Consider your own propensity to vacillate back and forth between the Orlando vacation or that trip to the lake.
  Many owners of vacation homes have taken the power back from the management companies and decided to have a go at it themselves. Aptly realizing that just because a management company tasked with managing, maintaining and monetizing a properties physical assets is there doesn't mean they know what they are doing. (As a side note you would be hard pressed to find a single management company in existence today that actually had anything to do with the development of the asset they are managing.) The owners that are successful at managing their assets are typically those that got in early on web phenomenon like VRBO.com or who have a closed circuit distribution (like a work place) to farm from. This group is certainly the exception rather that the rule.
  So what are our options?
  The time has arrived for shift in the paradigm.
  Are you rental ready?

A three hour tour...

By now the news is a few months old so this isn't shocking to most but in late September, vacation giant Wyndham Worldwide announced that it would be purchasing a regional vacation rental management company that many are very familiar with, ResortQuest. On the face of it this sounds like a promising proposition for owners that have chosen to have ResortQuest manage their vacation homes. Wyndham is, after all, a giant in the industry and the name recognition alone must have real value to vacationers in general. Right? It would be kind to say that ResortQuest has had its share of "challenges" in its history since transitioning from Abbott resorts in the 90's. This could be the shot in the arm that the company needs to revitalize a flailing and antiquated business model. Right? After all the problem for most owners has been the rate and not necessarily the volume of guests. Right?
 Wrong. There are so many problems here it's difficult to assess where one should begin. Lets start with who is actually purchasing ResortQuest. Many would be somewhat surprised to learn that the company that is purchasing ResortQuest is not exactly the hotel chain that is known the world over for class and dignity. It is actually being purchased by the time share side of the house. That's right the time share guys are positioned to be in the drivers seat concerning the the use and distribution of its newly acquired managed assets. These assets include your vacation rental unit if you happen to currently be under contract with ResortQuest. What's even a little creepier to me is the fact that this new ownership entity Wyndham Exchange and Rentals is merely a new brand on an old company that you may have received a phone call or two from during dinner time before you got on that national "Do Not Call List". That company is RCI. If you've ever been in one of those time-share tours in Orlando you know how terrifying this is. These are the same people that offer you a 3 day 2 night stay in a luxury hotel for $59.00 and all you have to do is go through a 3 hour presentation. Ugh. Try this fun little exercise when you get a moment. Go to your Google search bar and type "who is RCI". I find it telling that the first list is entitled "Consumer complaints about RCI". This is sort of like Amway becoming AmeriStar to hide who they are. I'm pretty sure it wouldn't matter to me if OJ Simpson changed his name to Bert Schultz, I still wouldn't let him date my daughter.
 Keep checking back for more on this story and what you can do to protect your vacation rental investment.

Get "Rental Ready" with My Rental Ready

 My Rental Ready is a concept born of necessity. We observed the landscape of management companies, real estate agencies and travel distribution channels and came to the conclusion that we are at one of those pivotal moments in the life cycle of the travel business. We are observing one of those narrow windows of opportunity where technological innovation and market realities can produce mutually beneficial results for both owners and travelers.
The vacationers of today are utilizing the same tools that that the seekers of ANYTHING are using, the internet. The question then becomes simple, who is it that owns the distribution channels? As one grazes through the seemingly endless listings available on the search engines such as Google it becomes increasingly clear that making it to the top of the pile will take a combination of money and time which the average vacation rental owner doesn't necessarily have copious amounts of. My Rental Ready sees the landscape from the perspective of those whom have owned and managed vacation rental homes as well as vacation rental businesses. We are the insiders and we can show how to win in this very competitive marketplace.