Will ‘Hosts’ Be Replacing Traditional VRMs in 2023?

Posted on Categories Analytics, Industry News, Property Management Software, Search Engine Optimization, Vacation Rental Marketing
Where's the Brand - Funny Graphic

Those of you who know me or have seen me present at conferences know I love my soapboxes! I can get sidetracked into a rant at any time, especially when I am passionate about something like vacation rental seo. But that’s half the fun of it right? Not being scripted.

Those of us who have been in this industry 10+ years know each year is different in terms of vacation rentals. Occupancy, cost of goods, overhead, digital trends, economy, weather conditions, mass viral outbreaks and plenty more – all have an effect on both rental rates and occupancy. Even my colleague here at ICND said,

“ya know, about every 3 years, there is something major that affects rentals”.

Oh, how true that is! While it may not hold true for every market across the globe, there is a pattern! Let’s hope, though, that 2023 remains a fairly calm year.

First, a bit of context. Most of our vacation rental marketing clients are large established property management companies that have been around for 10+ years and have over 50 rentals. HOWEVER, in the past couple years, we have been building more and more websites for smaller vacation rental companies — ALOT of websites, much more so than ever before. We’ve also been helping these newer companies establish a brand presence for themselves as well!

It’s awesome we have so many new players in the game that are transitioning away from the “Airbnb host” into a traditional property manager. That means the industry is growing! That’s good…. right?

Airbnb Meme

Let’s Start With the Good News for the Industry

2022: A Return to Normality

If you read my blog post last year predicting 2022 and how occupancy will fair well in 2022 (which, I haven’t edited at all since I published it in 2021), I was pretty close, right? Many of our property management companies we do marketing for reported they do have much higher ADR (average daily rate), as well as occupancy that was comparable, if not better, to 2019. Of course, ADR was coupled with a higher cost of doing business, so profit is a totally different discussion here. The booking window also shifted in our favor. While many property managers did have to offer last-minute discounts, it was nowhere near as bad as it had been in the previous years.

A Growing Industry

We can thank Airbnb for many things. Seriously! Don’t snicker. Airbnb became mainstream popular, surpassing VRBO (Homeaway, Expedia, whatever umbrella you want to call it) in terms of trendy popularity. Even before COVID-19 was even a thing, Airbnb had a strong steady momentum year after year.

Airbnb is now a household name, just like Kleenex.

Pre-2019: “Oh, are you staying in a vacation rental?”
2021+: “Oh, are you staying in an Airbnb?”

That’s why we at ICND are always pushing brand. Brand, brand, brand. Make your company a brand to be remembered! Just like Airbnb did.

Moving forward, more people will be utilizing vacation rentals now that they have had a “forced taste” for it, which many would say is a good thing. However…

Funny Graphic "Where's the Brand"

Too Much of a Good Thing?

A surge of newly registered VR companies have emerged since COVID and are gaining momentum in quantity, riding the post-covid wave of “full calendars” due to demand. These new companies are starting off with 2, 3, 4 rental units, and utilizing Airbnb to get their rooms filled. A fine practice – use Airbnb for the tool that is it and what they excel at.

So Many Hosts, But So Few Brands

New property managers aren’t establishing themselves as a brand, but rather as a host through Airbnb as their only source of leads.  No email marketing, no brand website. The “AirBnb Superhosts” Facebook group is 202k members strong, and full of some very basic questions that veteran property managers could handle with their eyes closed and one hand tied to their foot.

These new managers are solely reliant on algorithms from a company that sides with the guest. One programmatic change on Airbnb’s platform (just like they did when they revamped the website in the summer), and the PM’s calendars or booking pace can screech to a halt.   

Couple that with inexperience, guest demands, new regulations, rising costs of goods, recession and negative press Airbnb has gotten lately, this “boom” may start to fizzle as new companies get out of the game,  thus freeing up the inventory that established property managers (who know how to pivot) to scoop up and add to their program.

I do predict many of these hosts are going to realize “VR management is not what it’s cracked up to be” once the times get tough and a business model hasn’t been established.

Again, our best advice to you, build your brand as much as you can. If someone Google’s your house name, your website should show up. If someone Google your company name, your website should show up.

Airbnb Hasn’t Hit Its Ceiling Yet

I’m going to come out and say it. I like Airbnb. Yep, shun me all you want. Go ahead! I know you reluctantly agree though (and are even a bit jealous of them).

Think about it. They are smart.

  • Side with the guest 90% of the time with disputes = keeps them coming back
  • Build a hyperfast website for mobile early in the game = keeps them coming back
  • Show personality and create a connection by displaying the host information = keeps them coming back

However, the public IS catching on!

Lower rates if you book direct? Yep! Hence we have seen a huge influx of property names as landing pages on our websites over the last 4 or 5 years. People are Googleing the names of the properties!

Professional Property Managers take better care of you. There are many horror stories out there about lack of care with hosts and Airbnb is taking the blame.

Hosts & Properties Aren’t Vetted as they Should Be, leading to bad guest experiences and properties, forcing renters to avoid Airbnb and even vacation rentals due to a lack of trust in the whole concept. (Which, is one of the main reasons for startups like The 100 Collection for curated and trusted vacation rentals. Good, amazing rentals do exist!)

Even with that being said, Airbnb isn’t slowing down, showing continued growth every year.

What’s Next Then? Take Control

We have so much great software out there that helps with prediction or scraping data for occupancy trends and rate adjustments. The only problem with those softwares is they don’t have ALL the data for EVERY company out there, especially Airbnb, which is where most of the independent hosts do their business (many of which don’t even know what a PMS is if you check out the facebook group posts). This is why we need to reflect on the past to predict the future (wow, I sound like my high school history teacher there), and remember the trends, not just what an algorithm predicts. Computers are only as good as the programmers who create them.

We probably won’t have any huge disruptors this year. Knock on wood. However, there is always one thing for certain:

People need and take vacations every single year. The demand will always be there. It waxes and wanes, sure, but it will always be there. How the average person gets from point a to point b is up to you though, the property manager. If you are a host wanting to diversify, don’t put your eggs in a single basket.

Author: Paul Hanak

Paul built his first website at 12 and ranked his first website on Yahoo when he was 18. Fast forward through 13 years of vacation rental marketing experience, he is now the Director of Digital Marketing for InterCoastal Net Designs, leading the team through some of the biggest industry changes for the vacation rental market, and some even bigger changes in the Google landscape.