Escapia Blog - Vacation Rental News and Trends

Think for Yourself

 

By John Suzuki, VP Sales, Escapia

Has the fear of change paralyzed you? The recent downturn has led to a "deer in the headlights" reaction from many vacation rental managers. With all of the incredible opportunities to leverage new ideas, why are so many frozen in their tracks?

I recently gave a presentation with Dr. David Fischbach on one of the most relevant topics today at the western seminar of the Vacation Rental Managers Association. Yield Management, offering the right rates at the right time (discounts AND premiums) is critical today, and our presentation was one of the highest rated of the event. And then came the answer.

Within 24 hours, a software company published their position that Yield Management is a dangerous tool, can't possibly be used effectively by vacation rental managers, and that the best way to set your pricing is by following your competitors. To this I offer you three perspectives:

1. Vacation rental managers have already implemented effective yield management strategies - Including Dr. Fischbach and many others.
2. If your strategy is to "follow" your competition, get out of their way.
3. The scenery only changes for the lead dog. If that's not you, yuck.

So here's my message: Think for yourself. Opportunities abound to improve your business with new technology. IBM once copyrighted a word which they used around the world. It encapsulated everything IBM wanted its employees to do. That word:  Think.

We all know what happens to lemmings at the cliff's edge, and we also know what happens if you stand in the middle of a freeway too long.

Think for yourself, and think fast.

EscapiaONE Webinars

 

 
By Kris Lande, Product Marketing Manager

Want to take a peek at what Escapia has to offer vacation rental management companies?  For people looking for a quick overview, Escapia holds webinars every other week demonstrating the powerful, integrated EscapiaONE system.  The webinar lasts one hour, includes an overview of EscapiaVRS, EscapiaWEB and EscapiaNET, and is free to attend.

Visit our site to learn more about the webinars and to register!

Rates on the run: recession pushing down pricing

 

 By Bill Furlong, CEO

As you've seen in previous posts, booking dollars for vacation rental managers are down significantly in 2009.  We took a deeper dive into the numbers to see how much the decline is from a drop in dollars per booking instead of the number of bookings.

The first thing we looked at was the average booking size.  As you would expect, the dollars per booking have declined this year.

 

As the chart shows, average dollars per booking were just about flat in January and April and down in February and March. 

But the average booking size tells only part of the story.  So we looked next at average length of stay to see if guests are taking longer or shorter trips this year.

What we found was a mixed bag.  Bookings were longer in January and April, shorter in February and the same in March.

But what is interesting is what you see when you combine the two -- average dollars per booking and average length of stay -- to see what has happened to the average daily rate.

 

Now the picture looks a little more like you would expect.  Average daily rates are down a consistent 7-9% versus 2008 for each month so far this year.  So what we see is that a bit less than half of the decline in booking dollars so far this year is from a decline in rates with the remainder attributable to a decline in the number of bookings.

Up next...are lead times getting longer or shorter?

Customer Video: Re/Max Kauai

Cyrila, Owner of Re/Max Kauai, talks about Re/Max Kauai's decision to use Escapia vacation rental software. Cyrila discusses Escapia's easy integration, how Escapia helped her business through the tough economy, and Escapia's reservation grid.

Yield Management Webinar - Next Week!

 

By Kris Lande, Product Marketing Manager

Last week we wrote about the Yield Management presentation we hosted at the VRMA West show in Portland. 

As the presentation in Portland was such a huge success, we'll also be hosting a webinar on May 26th at 12 pm PST for those of you who were unable to make it to the session at VRMA.  During the webinar, we'll be discussing ways to maximize occupancy and booking revenue by adjusting your rates based on the supply of inventory relative to demand, lead times, last minute deals, premium pricing, and other factors.  Based on the great response from attendees at VRMA West, we can ensure you this will be a very beneficial webinar.

To sign up for the webinar, click here.  We look forward to seeing you online!

Palm Trees and Sun In Florida

By Bryan Boice, National Sales Manager

John Suzuki, Mike Zaroudny, and I had a wonderful time visiting with folks in Florida last week at our annual Panama City (May 12th) and Orlando (May 14th) vacation rental breakfast seminars. Both seminars had energized management companies and partners ready to tackle the current economic challenges head-on. Here was our favorite quote from a seminar attendee:

“Everyone who complains about their business but doesn’t take advantage of these seminars is really secretly wishing they would fail. I can think of no other reason to pass up this type of opportunity.” Dawn, Emerald Palms Private Pool Villas

Besides great participants, swaying palm trees and 85 degree weather made the time in Florida even more enjoyable. As a resident of a beautiful resort community, it’s easy for most of us to forget how great the weather and surroundings are. Don’t forget about what a powerful marketing tool this can be. Many of your former and potential guests live in places like Mike, John and I (where it was rainy and 50 degrees all week) and would LOVE reminders on how great things are in your destination. Occasional emails and postcards with images of palm trees and sun always do wonders to get people excited to visit. We’re looking forward to receiving ours soon – at least until the sun starts to shine in Seattle!

Eric and Betsy Laracuente of Near to Disney Resort with John Suzuki

April regional booking data shows that guests are going South and West

By Bill Furlong, CEO

There have been a few shifts in which regions are faring relatively better and worse during the current recession.  Some of the trends are consistent -- particularly the challenges faced by managers in the Rockes and Hawaii and the relative success of managers in the south.  But what was good news for eastern agencies and bad news for western ones is now the reverse.

Remember that a few months ago, when we looked at the regional data, the west was down 21% year over year and the east was down 15%.  As the chart above shows, now the west is performing better than the east.

Up next...how has pricing been changing in recent months.

Yield Management Presentation at VRMA: Right Prices at the Right Time

By John Suzuki, VP Sales

I recently had the honor of giving a one hour presentation on Yield Management at the Vacation Rental Managers Association Western seminar in Portland, Oregon with Dr. David Fischbach of BeachFront Only Vacation Rentals. It was the first time Yield Management (aka Revenue Management, Dynamic Rates) was ever presented at VRMA, and I later learned that many vacation rental managers viewed it as one of the most relevant and thought-provoking presentations given during the seminar.

I am pleased to offer you a 30 minute video overview of the presentation. Keep in mind that Dr. Fischbach's comments are based on his use of the yield management capabilities in Escapia's software. It is a very timely topic which may be controversial today, but will most certainly become a competitive necessity. Why? Because the technology to enable yield management for vacation rental managers is now out of the bag... through Escapia.

I welcome your comments.  If you'd like to learn more, I will present the entirety of the presentation on May 26th in a web seminar. Please visit our website to sign up. I also want to encourage you join us at the VRMA National Conference Washington, DC in October. With so much happening in the industry these days, it's a powerful opportunity for you to learn the latest and greatest and network with managers from across the country as vacation rentals transition into the mainstream of travel. We'll be there. I hope you will be too.

April Bookings Look a Little Stronger

By Bill Furlong, CEO

Bookings in April held close to the same year-over-year decline that we saw in March.  Dollars from April bookings were 14% lower than a year ago.

Looking at 12 months of results shows what a year it has been.  Booking dollars have declined in 11 of the past 12 months with 8 of the 12 months showing double-digit drops.

Does a 14% decline from a year ago sound about right to you? I’m willing to bet that for most of you, it doesn’t. That’s because the underlying data shows a remarkable range in results over the past year.  A 14% drop is the average; but what the typical agency is experiencing is all over the place. The chart below shows what percent of agencies are seeing results in a variety of ranges.

Instead of seeing a large number of agencies with results within a few points of the average, we see a wide range of results. Yes, a bit over a quarter of agencies see booking dollars down 25-50%. But your agency's results could be down even more or even up a lot.

To us, that demonstrates a few things:

1. First, the vacation rental management business has a diverse set of agencies pursuing different strategies and have widely varying results. This isn't a business where everyone is doing equally well or badly. The diversity of operating approaches is matched by the diversity of results.
2.  Second, there are ways to buck the trends and succeed in the current economic environment. It is worth noting that one-third of the agencies in our sample have managed to increasebooking dollars year-over-year. A quarter of all agencies have increased bookings by over 20% since last year. And as many agencies are up by 50% or more as are down by 50% or more.

Next up...what the results in April look like by region.

Standing Out in a Sea of Beauty

By John Suzuki, VP Sales

It's tulip season in the northwest! We took the one hour drive north of Seattle last weekend and found blazing fields of tulips, all in their countless rows of brilliant colors: reds, yellows, pinks, oranges, purples and more. It was yet another reminder of the beauty we are all blessed with.

  

As we walked the rows of uniform beauty, I came across a beautiful red tulip, exactly the same color as thousands of other red tulips. But this one was different: It was a red tulip in a field of thousands of yellows. There it stood, alone and seemingly lonely. But as I looked at this tulip I realized that it had found a way to differentiate itself in acres of equality. And while the yellows seemed to overwhelm it with their spectacular beauty, that little red flower stood tall and straight, and I imagined its flower pride in being different.

As businesspeople looking for that special something way to stand out among a sea of competitors, it occurred to me that a lesson could be learned from this little red tulip: It's not always necessarily a matter of really being different. After all, there were thousands of other red tulips. In this case, it was a matter of being different at the right time, right place, with the right "service." This little red tulip really stood out. I love tulips.