Choosing the Best Vacation Rental Location

This post was written by Volo for Tripping.

There are many reasons why people choose to purchase vacation homes. Sometimes it’s for the love of an area and pure personal enjoyment. Other times it’s purely for cash flow. If you are somewhere in-between or are looking to run your home as a full-time business, the location of your vacation rental is one of the most important decision you will make.

While it can be possible to turn a vacation home in the middle of nowhere into a successful business venture, I do not advise the risk if you cannot afford uncertainty. Choose a location you love, but be cognizant of its ability to attract tourist.

Tripping.com’s Top City Destinations

San Francisco, CA

New York, NY

Seattle, WA

New Orleans, LA

Chicago, IL

Tripping.com’s Top Beach Destinations

San Diego, CA

Destin, FL

Key West, FL

Gulf Shores, AL

Honolulu, HI

Top Tips For Choosing a Vacation Rental Location

For most, location seems basic and research often ends after selecting a particular city or a general neighborhood. Don’t stop there. Just because your condo boarders Central Park, doesn’t mean it’s on the right end. So what’s an out of towner to do?

1. Go for a walk and take in the surroundings

Don’t hire a cab or rent a car, walk. Walk in all directions around your property for blocks. What do you see? Look at the quality (and type) of shops, businesses, homes. Will they complement your business? Do you feel safe on your walk? Take another walk at a different time of day, including the night. A beautiful beach can look completely different when the tide is out. It can also be quiet and pristine on a Wednesday but packed with locals on Saturday (which may or may not be great for your intended experience).

I once stayed in a vacation rental right next to train tracks where trains passed by every thirty minutes. While some noise levels, particularly in urban locations, are inevitable it’s important to understand what is around you. This may sound ridiculous but not too long ago I stayed in a property that was located about 500 yards from a sewage treatment facility. I was sick to my stomach a few hours everyday when the wind blew wrong.

2. Study the local landscape

If you are buying a home or land in an area you aren’t intimately familiar with, take extra time to study the details of the land and area. You don’t want to show up on a pristine day, only to find out later that during your peak season strong winds blow large tides onto your beach and make swimming a hazard.

The same holds true for erosion. Understand what happens to your property when the extreme elements (rain, cold, heat, whatever) are in full effect. Will your property flood? Do you have exposed water mains that could freeze and burst?

My Personal Experience

When I bought my vacation rental in Park City, Utah, I noticed the neighbor had recently excavated and laid a new driveway, which had already cracked. Park City happens to be the high desert, so this was a big red flag. Sure enough, the water main was exposed and had a history of bursting. In my purchase negotiations, I had them move the water main from the side of the home to the front where it now connects with city water (all underground). The project was estimated to cost $15k, but really cost over $20k due to the depth of the city water connection. A fee I’m glad I didn’t have to pay!

luxury pool

3. Be aware of the elements

If you are planning on having a pool, you will need to create a space with consistent sunshine. If a building permanently blocks this opportunity, your rates might be substantially lower than you would have thought. Too much sun, or high temperatures, can also be problematic and reduce travel to your hopeful location for long periods of time. Lastly, understand how the elements will impact the design of your property and maximize what is naturally bestowed upon you if you are building.

4. Never be pressured into buying

Don’t let anyone rush you! I don’t care if an all cash offer is supposedly looming, if you are not allowed time to research your investment, walk away. This is when the biggest mistakes are made. Likewise, if something doesn’t feel right, even if everything else by examination seems perfect, trust your gut and move on.

This post was written by Kris Getzie

Kris Getzie Hospitality Consultant

Dwellable Q&A

This Q&A was for Dwellable and can be found here.

1) How did you get into this business?

My parents have owned and operated vacation rentals and boutique Inn’s for nearly twenty years, so the industry and it’s transformation have always been a huge part of my life.

After establishing my individuality, career and finishing grad school, I knew it was time to make the transition into this industry full-time. First by taking over the operations of my parents businesses and consulting on the side, then buying my own.

In a way, I was destined to be here. Not just because of my parents (they aren’t into free rides), but because of a deep interest in economic development. Responsible and sustainable tourism provides significant means for lesser developed countries to address their fiscal, environmental, healthcare and education situations.

I’ve also spent time working with a variety of organizations and governments addressing these issues as a hospitality consultant… It’s completely rewarding.

2) Tell us a story about the absolute best or absolute worst vacation rental experience you’ve ever had.

My friends and I were in Culebra, Puerto Rico, at my parents VR, when we met a retired couple who regularly hosted guests on their catamaran. They were locals (kinda) and offered us a trip. We hopped onboard.

I’d never sailed prolifically before, so that was a great experience in and of itself… But the way they hosted us forever shifted my perception of what a great VR experience should be.

They let us into their lives; showed us how they prepare for a trip, how to cook on board, drink like sailors (literally, Sailor Jerry—the rum—was a flowin’), tie knots and brought us diving at amazing little islands we would have never visited otherwise.

Of course, they had the details of their stay perfected and I still remember the smell of their sheets. Literally, one whiff of sea salty-butter-pineapple and I immediately want to be on that boat (talk about a retention strategy).

They were entertainers. They shared fantastic stories about their experiences sailing, history of mariners and took us all out of our comfort zones. A decade later, the girls and I still talk about that trip!

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3) How is the rise of mobile devices changing the vacation rental business?

Mobile strategy often refers to developing a mobile website that enhances the overall vacation rental search and booking experience.

I think it’s important to embrace this. But with 68% of smartphone users sleeping within two feet of their phone, it’s equally important think beyond the mobile website as devices have the ability to enhance guest engagement on a more personalized level before, during and after their stay.

Integrating an app, for example, provides guests with an easy way to control their experience.

They might buy mountain lift passes, a spa package or view a virtual tour before arrival. During their stay they might want to request additional maid services or book a dog walker. All great ways to drive ancillary revenue, by the way. I also think most owners could benefit with an app after departure by continuing engagement. Not stalking! But to say thank you, invite them back and ask for a review.

Mobile devices are also great for face-to-face interaction if you can’t be there physically. I had a guest FaceTime me because he couldn’t figure out the ski rack. Within two minutes I was able to guide him through the problem. It was super easy and it was nice to cyber meet in our PJ’s 🙂

4) Word of advice to VR owners?

Always be authentic.

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The most successful VR owners I have encountered consistently show their personality and have an ability to connect their guests to the local culture, in their own way. Consistent VR industry standards are obviously important (in terms of cleanliness, communication and so on) but the one thing no one can ever duplicate is your authentic and unique presentation of an experience.

I love what Vayando is doing. Once they are established, I hope to see them connect with vacation rentals to enhance the overall travel experience!

5) Insider tip for travelers in your area?

Regardless of what brings you to Park City, collect locals as your wingmen. They are guaranteed to be interesting people and will give you a fantastic day-in-the-life tour!

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They’ll bring you to backcountry slopes you’ll never see otherwise (maybe not via snowcat, but you’ll get there), insane bike routes (mountain or road), sketchy food trucks with delicious grub, or random concerts outside of Park City (Twilight Concert Series, for example, features the likes of De La Soul, Beck, Thundercat and local artists… for $5!).

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Kris Getzie is Founder & Principal Consultant at Volo, a hospitality consultancy, and she loves to help her vacation rental and boutique hotel clients crush with an amazing brand and dialed operations. She is obsessed with chocolate, learning, random adventures and getting her two kids out to explore the world.
Follow her on Twitter @volovantage or at www.volovantage.com.

Winter Rentals: 5 Ways To Attract Off Season Guests

This post was written by Volo for Tripping.

Just because high season summer reservations are coming to an end doesn’t mean your vacation rental business cant thrive in the winter rentals market. Unless you don’t have heat or property access during the winter, it is possible to capture the elusive out of season guest to help pay on-going fixed expenses!

Summer guests, in general, are looking for lazy days on the beach and a boat. They want sunshine and family interaction. You probably market your property as such through captivating photos, property descriptions and offered activities.

Fall and winter guests, on the other hand, might have dramatically different desires for their out of season getaway. Understanding your guest and how their needs shift throughout the year is the most effective way to attract out of season business.

Top Tips for Winter Rentals

1. Market Your Rental For The Off Season

Your listing ad, website and home itself probably already promote summer festivities. This is great for the high season, but won’t necessarily attract guests looking for winter rentals. Update your photos, property descriptions and amenities to up-sell your winter welcome.

Ensure the beds have really warm duvets, throws and unforgettable sheets (LL Bean Flannel sheets are my personal choice). Provide extra wood for the fireplace (with usage directions and fire extinguisher!). Warm colors and soft lighting will take the cozy factor up a notch and pictures of said ambiance work wonders for your ‘winter retreat’ section on your website, if you have one.

2. Loosen Your Booking Requirements

Travel decisions become impulsive (often booked only days in advance) with shorter stays. If you typically require weekly reservations, offer nightly rates to promote last minute weekend getaways. The goal is to become attractive to a larger audience, with less flexible schedules.

3. Make Sure Your Pricing is Competitive

It’s really easy to price too high in fall and winter. Resist the temptation! With so many vacation rentals vying for the dwindling market, potential guests won’t give your home a second glance if your rates aren’t accurate reflections of the season.

Park City

4. Offer Compelling Events & Activities for Guests

Research festivals, concerts, tours and events in your area so you have plenty of attractions for your potential guests. Is there a local University? Understand their events calendar and how your home rental can fill a market need.

Develop promotions with these organizations, inclusive of your vacation rental. I love working with the Park City Chamber of Commerce (which also acts as the Tourist Bureau) to develop marketing packages for press visits and other planned promotions during the off season.

Also, don’t overlook the importance of seasonal activities offered at your home. A hot tub, snowshoes and sleds are really fun and great additions for winter rentals. They will quickly pay for themselves.

5. Pay Attention to Economic & Travel Trends

According to the U.S. Travel Association, 41% of American workers do not plan to use all of their paid time off (PTO) in 2014. Although 96% of those interviewed agreed on the importance of vacation, 33% say they “cannot afford” it.

By keeping a pulse on larger trends, you will be able to identify new opportunities to attract business. If more travelers feel inclined, for one reason or another, to forfeit extended Bahamian winter trips for a weekend getaway closer to home, how can you capture their attention?

Be creative, flexible and have fun creating options to attract out of season guests. They will appreciate the effort and they will return.

Increasing Your Vacation Rental Income

This post was written by Volo for Tripping.

Unlike vacation rentals, hotels have many ways to bring in additional money. Revenue from their retail shops, food & beverage outlets, spa or premium internet charges, for example, can more than double their revenue beyond room rentals. This is what hoteliers call ancillary revenue.

Revenue managers focus intensely on their ancillary revenue channels, in addition to controlling expenses (like you would your household expenses) and increasing RevPar (Revenue per Available Room). RevPar is literally a basic health measure that looks at room rates (or ‘home nightly rate’, if you will, for VR’s) combined with occupancy.

Through buying featured ad placements on vacation rental listing sites, increasing the subscription package or taking cues from blogs posts on building a vacation rental brand, many vacation rental owners are convinced occupancy and rates are the only ways to increase profitability.

These are all very important aspects, no doubt, especially increasing occupancy through repeat guests. But I encourage you to think more like hoteliers today, beyond just ‘RevPar’, even if you don’t have immediate access to revenue enhancement centers (the physical places ‘ancillary revenue’ is generated at a hotel).

You can increase profits, aside from occupancy and rates, albeit through less traditional means.

I’m not insinuating that vacation rental owners nickel and dime guests as airlines do by charging for the basics (i.e. checking your luggage). We are in the competitive hospitality business as independents, have a standard guest experience and understand that some items are a minimum expectation!

Every single guest needs to receive a quality experience for their payment. Luxury sheets are required if you are offering a high-end rental home, for example.

I’m not fond of guest check-out chores under any circumstance; however, it works for some experiences (when the expectation is presented clearly prior to booking). I cringe when owners or managers drop a list of check-out chores, on top of cleaning fee, in their house manual just to save a buck.

I’m referring to increasing revenue through differentiating your product offerings and providing customized options.

Examples!

A Volo client had a great little Inn in Mexico near a community of soap makers. The owners offered amazing complimentary soaps in each room, but also introduced a soap concierge program encouraging guests to order personalized soap scents; lavender, melon, vanilla or any mixture thereof. Guests used them during their stay, brought them home and purchased as gifts. The ancillary venture not only increased their revenue by 5% (in addition to other implemented strategies), but gave back to the community.

Other examples could be snack/lunch boxes (preordered for planned outings, not to be confused with a gift basket left for new guests… although, pre-arrival grocery shopping is also a great add-on), upgraded bathroom amenities or linens, gift cards and other easy-to-deliver items. Know who your guest is and you will be able to define ancillary revenue sources they will engage with.

One client saw nearly a 10% increase in revenue by sending her guests to local businesses she loved. According to FlipKey, the average homeowner in its network earns $26,000 a year, that equates to $2600 in additional revenue.

We achieved this by developing referral partnerships that complemented her vacation rental experience; ski and outdoor equipment rental companies, restaurants, spas, movies theaters and art galleries. The commission per referral was between 5-15%, depending on the business partner.

Each ‘revenue center’ may not independently skyrocket your profit, but collectively, it can add up quickly!

This post was written by Kris Getzie

Kris Getzie Hospitality Consultant

Distribution Channel Analysis: 5 Things To Know

The hotel industry has changed dramatically over the past 15 years. The most challenging of which is in the area of distribution.

Each distribution channel has associated costs, benefits and is evolving quickly. Online travel agencies battle with search engines, social media platforms and hundreds of hotel websites for the customers attention.

Intermediaries act as gatekeepers and impose increasingly higher fees for directing traffic to hotels, impacting distribution costs. Simultaneously, the transparency of hotel pricing structures online puts pressure on already competitive rates. With higher booking volumes passing through intermediaries, the costs imposed and pressure on rates, hotels are challenged to maintain profit levels.

Regardless of the distribution channel used by consumers, it is important that each hotel attempt to understand the dynamic of each channel and analyze the costs and benefits in a meaningful way to create sustainable revenue and profit streams.

When approaching your distribution channel analysis, these 5 things are good to keep in mind:

1. Share Shift

In a mature U.S. lodging industry, incremental demand by any one channel is difficult. However, each channel can advantageously ‘share shift’ from another hotel in its market. Hotels should develop tools to share shift from all channels, not just OTA’s (online travel agents) as receiving business through yourwebsite.com, for example, will incur lower transactional fees and may have less impact on ADR (average daily rate). Share shifting mostly occurs:

  • From one hotel to another
  • From one time period to another
  • From one channel to another

2. Conversion

Some hotel distribution models allocate resources to acquisition, persuasion and retention. Those hotels will benefit from working harder at converting existing traffic from all channels, and on retention, rather that emphasizing acquisition. Acquisition is expensive, especially if there isn’t a strong conversion and retention plan in place.

3. Costs of Distribution

Knowing the costs associated with each channel is essential for management in the fragmented distribution landscape, even when the costs don’t appear on the P&L statement.

4. Benefits of Distribution

Equally, it’s critical to analyze the full benefits from each channel including length of stay, ancillary spend, repeat and referral potential.

5. Commoditization

In the current marketplace, a common theme portrayed is that last minute bookings result in better deals. So potential guests wait to book. These price drops inform that your distinguishing feature is price, not the quality, experience or differentiation from other hotels. With third parties targeting the same guests, and sometime offering last minute deals, it’s important to be cognizant of who controls your guest relationship. It will strongly affect the value of your brand.

*Pictures from Google Images.

Insider Tips To Extend Your Rental Season

This post was written by Volo for Tripping:

I distinctly remember worrying about the looming slow season when I began my career in the vacation rental business. I worried about it before peak season even began. Like most people, everything I have I worked really hard for and the thought of losing money on my investment, and possibly foregoing my new career, was scary.

The truth is that a well-positioned vacation rental home, with a thought out marketing plan, should reap rewards. Regardless of your situation, it is possible to increase your revenue substantially by extending your season into the shoulder months, or creating a new one completely.

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How to extend your booking season

1. Have a game plan! Define your plan 3-6 months prior to start of your slow season so you have enough time to attract the right guest(s).

2. Should you find a tenant? Retired couples are great candidates for 6-8 month leases. Ensure you are crystal clear about the lease duration when it is less than one year.

3. Is there a market to continue renting your home out nightly or weekly? If so, assess your rates and reduce your minimum stay requirements to 2 or 3 nights. Also provide reduced rates for weekly and monthly stays.

Many travelers are growing to appreciate less traveled times across the globe. Fall seasons, for example, see lower traffic and have milder, but equally beautiful, weather. Lower prices don’t hurt, either.

4. Promote the advantages to staying at your home in the off season. What is there to do nearby? What is the weather like? Be generous with the attraction information and add photos of events, scenery and your home during those months.

vacation concept background with interior elements

5. Suggest off season getaways on your website. Mountain towns are known for their winter months, so I suggest that my local clients create summer and fall getaways packages. For example, guys mountain biking trips, girl spa weekends or even Olympic Park adventure trips.

Partner with local businesses for discounted gift certificates to create really unique and tasty (literally- include restaurants coupons!) experiences for your guests.

6. Understand life events. Graduation, both high school and college, can draw travelers in June. Wedding are booming in the fall, a shoulder season for most locations.

How can your home accommodate these groups? Vacation rentals can certainly be a more affordable housing option than a hotel, so be sure to suggest it as such. Provide groups with flexible check-in and departure days if you normally regulate them.

For one reason or another, you might be looking to extend your booking season. If you market your home appropriately, and price it well, you can certainly increase your revenue with a little extra effort.

3 Questions Before Buying A Vacation Rental

It’s no secret that the vacation rental industry is hot. Because of this, I’ve been having a lot of discussions with individuals wanting to dive headlong into income property ownership.

The first questions new investors have been asking me involve the money needed to obtain and maintain a second home and/or if it will turn a profit. This is an important piece of the equation for long-term viability, but should not be the primary factor of consideration.

As in many industries, opportunities for financial success exist. But many proprietors do fail because they lack the know-how, drive needed to startup or the ability to look at their business situation critically and realistically.

Definitely get excited about the potential! Ambition is what keeps the dream alive. Just be sure to find time to step back and ponder these three important questions before buying your vacation home to ensure it’s right for you:

1. Intentions: First and foremost, everyone should understand why they want to embark on an income property adventure. Ask yourself what you like about hospitality and why you want to host travelers.

If your primary intention is to quickly profit on a booming industry with little effort, vacation rental ownership is probably not for you. Managing your own vacation rental takes a lot of thought, care and hard work. If you are not interested in (or don’t have the time to) build a hospitality business over time, I recommend a different venture.

Sensible ambitions for starting your own vacation rental business include, but are not limited to; your love of meeting new people, the desire to help create memorable vacations in an area you love, gaining flexibility to travel personally (a lot of people rent their personal homes to pay for a vacation!) or even the desire to increase your income in the future.

Owning and managing my own properties is very satisfying. I absolutely love interacting with travelers and the flexibility my job brings. But, without consistent effort it would not a profitable career. Challenge yourself to fully understand why you want to do this!

Girls Trip 2007

2. The Art of Liking People: Successful owners love people and interacting with all types of personalities. If you would rather chew glass than deal with guests regularly, this might not be for you.

A lackluster attitude will not excite travelers enough to rent your home and certainly won’t make them feel welcome upon arrival. Profitable owners have a high rate of repeat guests because they have outstanding guests service and an infectious attitude. It’s easy to sense if someone is genuine (which then reflects on how we feel about an experience), so ensure you are really excited to work with people.

Equally important to note, you will encounter difficult situations with authorities, neighbors and problematic guests. In my experience, they don’t happen often (I screen guests before booking) but inevitably there will be time when you have to navigate diplomatically. It’s important to be honest with yourself from the start and understand if you are up for the constant engagement.

3. Business Sense: There are a lot of skills needed to be able to build a profitable vacation rental business. Of which, organization, being detail oriented, and the ability to manage a business are key factors to success. These skills aren’t difficult independently, and can certainly be learned, but I think they are important to be cognizant of before jumping in.

Managing the home itself is much like running your own home; you have a mortgage and utilities to pay monthly. That part is pretty simple. However, the many additional moving parts can be overwhelming at times so it’s important to have an organization system in place. Below are a few examples:

  • Inquiries and bookings can come in quickly before peak season (and at inopportune times). It can be difficult to keep details straight (name, contact information, purpose of the trip, how excited they were and so on), so I always carry a moleskine notebook with me.
  • You will need to ensure your cleaning and maintenance companies (if you choose to hire this out) logistics are tightly organized between bookings.
  • Business licenses need to be kept up to date and sales taxes need to be paid (sometimes quarterly or monthly depending on how your business is setup).
  • Maintaining clean books for your accountant.

Marketing, strategy and finance all come into play. It’s okay if you don’t have a deep understanding of these from the start but you should be interested in learning more of each and in strengthening your organizational approach as you develop your vacation rental business.

Honestly assessing your intentions, life situation, skills and knowledge will help you determine if you should consider this venture. If all signs are a go, rest assured knowing you can be profitable doing so.

Girls Trip 2007

Tripping Partnership!

Volo is happy to announce a formalized partnership with Tripping, the world’s largest search engine for vacation rentals!

In addition to blogging regularly on Tripping, Volo will develop a prolific series of vacation rental resources to help real estate investors achieve higher occupancy and profits. We have already been hard at work creating books, tutorials, podcasts and webinars and look forward to sharing them with you and our new partner soon!

As a special Easter treat and our first Tripping blog post, here are 5 more Secrets to Vacation Rental Profits (in addition to those posted yesterday with Nancy Tallman).

If you have specific topics you would like us to cover in these resources, please leave a comment or send me an email (kris@volovantage.com)