VRBO Partnership Study 2007-2008

Upon taking my current position at Seascape Resort in Destin, Florida I was faced with the task of convincing owners who were strapped for cash to work with us as their management company instead of going the VRBO route. I did some research with local VRBO owners and management companies and came up with the following hypothesis:

Estimated Incomes:
Management Company Alone: $26,221.50
VRBO Owner Alone: $24,867.22
Partnership: $31,680.10

Basically these numbers reflected my hypothesis that a partnership would produce a higher gross income per rental unit than either entity working alone.

The results of this study were astounding! At the end of the year I calculated that owners who were on my rental program but also actively participated in marketing of their own unit resulted in a 20% increase in their gross income over their stand alone counterparts!

Active marketing participation by owners means more than forwarding email requests and inquiries. Owners have an uncanny ability to really bring an intimate relationship to their unit in their sales pitch and it sells! Vacation rental travelers are different from hotel guests and are looking to establish a tradition, not just stay in a "unit". Most current owners were once just guests and they fell in love with the area and experience enough to invest in a piece of it for themselves and their family.

Whereas once management companies through VRBO owners were a threat, it is now commonplace for professional firms to offer an option for owners who want more control over the marketing of their property. It is a fallacy that owners believe that they save money by managing their properties on their own - you just don't write yourself a check; but I know that if you can afford a vacation rental, then your time is valuable!

Best Practices for Enhancing Your BidMyRental Experience

1) Always respond to bids in a timely manner. Responding to an email lead within an hour will produce a 40 percent closure rate; within three hours you will see a 25 percent close ratio and past three hours you see a dramatic decrease to about a 5 percent close ratio. You’ve done all the hard work – they want to book your property – contact them as soon as possible!

2) Never decline a bid, always counteroffer! No is a very powerful word in sales, you should always offer the potential guest a reasonable alternative to their request. Keep the conversation positive.

3) Know your numbers! Know what your average lead time on bookings is running. This typically changes seasonally and annually and you will have to analyze this fairly regularly but knowing your booking window will help you make better decisions. If a guest is bidding on next week and your booking window is a month out, you should be more inclined to take the offer – you probably won’t book it otherwise.

4) Communicate with your owners. Owners will be more flexible if you communicate with them and explain why a booking was discounted more than normal. Often if you explain that it was a last minute offer and some money is always more than a hundred percent of nothing. If you still feel resistance, get them involved! Let them decide on the bids that come in and cut yourself out of the decision process.

5) Maximize your marketing! Every bid is a qualified lead! Talk to these guests on a regular basis whether you accept their bid or they book. Send them last minute deals, specials and let them know when you add a new property to the list of units that you will accept bids on.

6) Analyze the data. At the end of each year, use your average bid rate to help you calculate how people really value the rental property and share this info with your owner. Setting accurate rates can really mean the difference between a successful rental season and a very empty one.

7) Putting bidding on popular units is a smart way to lure guests to less desirable units. Counter-offer with a similar property that is not booking as well.

8) Keep your information up to date. Change your rates, add descriptions as owners upgrade and take provocative photos. Guests want to imagine themselves on vacation in the property and nothing speaks louder than fabulous photos.

9) Be personal. When communicating via email, think of VRBO. It is popular because guests get a very intimate description and personal relationship with the owner of the property. Know the details of your property that make it special. Ask your guests what their needs are and respond accordingly.

10) Place several different types of units on the site for bidding, give the consumers plenty of options to choose from and don’t overwhelm them with too many of the same unit types; give them a sense of urgency and make your inventory look more specialized.

How to market and rent your own property while working with a management company

For many rental management companies, few words strike the same level of fear into their heart as VRBO. But lately they have been catching on to the tactics of VRBO owners and instead of fighting against them, have learned to work with them.

As a result, many rental management companies have set-up programs to work directly with the VRBO owner or have provided programs that provide the owner the best of both worlds. How is that?

Many management companies who typically would charge from 25-35% commission are now letting their owners advertise and accept bookings on their own at a reduced commission rate. I've seen from 10-20% with local management companies here in the Destin, Florida area. For property owners, you get the best of both worlds in that you can rely on the management company to market and rent your property, while at the same time you can advertise your property online, take as many bookings directly as possible and save yourself some commission.

For the property owner who likes the idea of VRBO but doesn't have the time or energy, this is a great solution. I'd encourage to find a local and experienced management company that offers this type of program if it fits into your rental property plan.

VRBO Site for Gulf Coast Owners

There is a great local travel guide website that covers the Florida Gulf Coast, including areas like Destin, Pensacola Beach and the Beaches of South Walton. It's a great place for by-owners to list their VRBO properties and is very inexpensive when compared with other VRBO listing sites.

You can check it out at www.GulfLink.com. They also run a few "sister sites" such as www.DestinFun.com and www.PensacolaBeachFun.com.

BidMyRental

There is a new online tool for property owners that presents a completely new way to book vacation rental properties. It's called BidMyRental and can be found at BidMyRental.com.

A Blog for Vacation Rental Owners

I wanted to start a blog for the VRBO industry to post anything and everything helpful to the VRBO community. From general business information to tricks of the trade, online marketing tips, etc.

Please support this blog with your frequent posts.