Time to Brand Your Vacation Experience
I'm lucky. Really lucky. I live and work in one of the United States' top vacation destinations.
With sugar-white sand beaches and crystal-clear, turqoise Gulf waters, a collection of designer towns and villages and average property prices in the millions - it is a little slice of heaven, what could be better?
Well that is the question I and many of my hospitality clients are asking - what can we do better?
For much of the tourism and hospitality sector 2020 has been a year to forget. Major hotel chains, airlines and car rental companies all saw huge drops in business, the need to furlough staff and file for bankruptcy protection.
In my little corner of Florida, away from Orlando and Miami and the theme parks and attractions relying on overseas visitors, we missed the worst of this. For better or worse, the state and local government only exerted 'light touch' regulation during the COVID crisis and let beach towns, communities and businesses set their own policies.
Despite a reduced Spring Break 2020, visitor numbers bounced back in the Summer and Fall and increases in destination spending, room rates and bed tax collections meant most businesses had a strong full year 2020.
An additional consequence of this laissez-faire approach was that tourists from our traditonal feeder-states across the South and Mid-West were joined by new visitors from the North East, Mid-Atlantic and even the West Coast, desperate to escape their lockdown or seek warm weather 'work-from-home' locations.
But, of course, there were some who didn't fair as well. Businesses which couldn't find or keep key staff or couldn't access the financial cushion to see them through those early months fell by the wayside. My vacation rental and management clients who did weather the early storm now find themselves in an interesting new position - exploring growth potential.
One word which has come to the fore, not just in the local market but across the tourism and hospitality sector nationwide - is consolidation. I expect this to be the dominant trend in vacation rental management over the coming months.
There are many factors driving this beyond simply picking up the rental homes whose management companies went under.
First, demand. The COVID crisis kept people on our own shores and they turned in increasing numbers to online travel agents to plan their trips, which fueled the growth of AirBnB, VRBO and similar vacation rental sites, and lead to the explosion of popularity of private rentals which clients reported they 'felt safer than large hotels or cruise ships'.
Secondly, the success of AirBnB's IPO caught the attention of the investment community who saw the property rental and vacation management sector as something 'sexy and new', and went looking to pump funds into the 'next airBnB'. In the last 48 hours, Vacasa - who had raised nearly three-quarters of a billion dollars in investment, swallowed Turnkey Vacations for an undisclosed sum.
And finally, with so many properties in the long-term retirement portfolios of individuals and many vacation management firms being 'mom and pop' operations, scale, efficiency and technological leaps forward surely must only be a moment away.
Well, yes and no. What some investors have tried - and failed - in the past, is to throw money at systems and websites and technology without realising the labour-intensive, manual and human scale realities of vacation management. A dirty home is always a problem. A broken A/C unit is a disaster and the reassurance of a real human only a phone call away to quickly rectify these issues is demanded.
And geography matters too.
Running a rental business in a ski resort is not the same as a beach town and wildly different than putting your 2 bedroom apartment in the city on AirBnB while you are away on vacation.
So, those with the most rental units don't always win.
What many of my clients and the investors they are talking to are increasingly focused on is those areas where scale can be achieved - technology to simplify booking and payment processes. And brand.
Successful vacation management companies have been able to keep their operations consistent, focused on gaining the all important positive reviews, top rankings and word of mouth/repeat bookings. A bit of an aside, but by way of illustrating the point, one of my favorite local rental properties is called 'Same Time Next Year' - recognising the reality of the business of vacation rental home ownership and so much more memorable than the hundreds called 'Seas the Day' or 'Just Beachy'.
So while better technology will improve the best companies' performance further, good branding seems to remain a novel concept for many in the vacation rental management sector.
Branding, done well, creates expectations and delivers promises.
But each rental property is unique, that's a big part of its appeal over cookie-cutter hotel rooms. So how can all these myriad products be branded without losing their true USP?
Good question, but what we are really in the business of providing - which can be branded - is the experience. I love that word!
And its not entirely alien to the hospitality sector, hotels have managed it. A Ritz Carlton experience is relatively uniform whether you are on a sun-kissed beach, a snow-capped slope of a glitzy city center. It lives up to an expectation and justifies a price premium within the contect of its location. And within some hotel brands they have been able to create sub-brands, offering distinct features and at appropriate price points, think Holiday Inn Express, Resort and Club Vacation, offering consistent and distinct experiences in very different places.
Going off piste again, as a kid in 70's UK - the peak of the package holiday era - I remember travel agents had different hotels priced and branded differently in separate brochures. Those with more exotic sounding names Le Majestic, El Senator or Hotel Royale in one - and the Sol, Solana and Park in another. Those staying at the more up-market hotels had fancier luggage tags and sat smugly at the front of the bus for the transfer from the airport. But often when you arrived on the sundrenched Costa you discovered the Royale shared a pool with the Park and that promised exclusivity quickly evaporated. But the idea of branding for differentiation was alive even then.
Brochures are dead and the internet is now the tool of choice. Moreover, tech savvy millenials expect to have rewarding brand experiences online - authentic content, video and reviews - think how much of an advantage a recognisable brand would give you over a simple search for; 'Vacation Rental + (location)'.
To achieve this we work with clients to understand the market, know who our clients and audiences are and what their optimum vacation experience looks like.
Building a brand around a promise allows our clients to focus on the nitty gritty of rental management to deliver excellence everytime and to innovate new and even more experience-enhancing activites, features and services to delight their customers.
No doubt, consolidation in the vacation rental management sector will continue at pace over the next few years. Those who will see the best return on their investments, will be the ones who have disrupted the market by improving the tangible experience for tourists and visitors but are also able to bottle that as a differentiating brand and make it work for them in repeat and new bookings.
As our up-scale beach towns prepare for Spring Break and Summer 2021, it will be interesting to see who succeeds in growing their business, not just in terms of the number of properties under management but in creating those memorable experiences which connect with visitors and generate brands visitors want to enjoy again. And again.
That is what we are here to help create.
Martin Liptrot runs 98Republic - a Business Development, Marketing and PR Agency which 'Makes Good Ideas Happen'. Contact: Martin@98RepublicPR.com