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.