Just a short note this week on some observations as more money is being pumped into the accommodation sector.
In particular, the metasearch engines and their advertising which seems to have some curious claims.
No, it’s not “Close encounters of the third kind” or even ET, although that could stand for Even (more) Trouble.
Just when you thought it safe to go out again, you may have noticed a few news releases that would give you a flavour of what may be on the horizon for managers and owners, where more and more of that specialist space is being compromised by big business.
The VRWS was hosted in Florence this year and as usual was well organised and had a great range of speakers including staff from Booking.com and Airbnb.
Attended by over 200 people, with both managers and owners from around the world, the auditorium was well attended despite the great opportunity for people to network throughout the days.
In recent years many of these conferences, from the famous San Diego VRMA meeting of 2014 to the increasing number of local groups have been weighed down by frustration and anger.
This has been directed at the overpowering emergence of certain OTAs and the change to some of their business models which have dramatically changed businesses around the globe.
Reading online forums, having private correspondence and attending conferences illustrates the disappointment of these changes in the traditional rental community but also a creeping acceptance of the developing status quo.
It’s only a feeling, but after hearing Robin Clifford make a well thought out Airbnb presentation, perhaps we are about to see another major shift about to happen in this market or an acceleration of current change.
1. Technology: We are seeing deeper integration of devices for home control and monitoring, new tools for guest communication, apps and suppliers of tours trips, home supplies and much more. Vanessa de Souza Lage presented on this subject which also emphasized the speed and diversity of the rental future powered by tech.
2. The guest experience: As Alan Egan said in his presentation, “there is no point advertising your en-suite anymore”. It’s not only millennials (we need to stop using this term), the whole world wants an “experience” and EXPECTS quality accommodation and hassle-free service.
3. Sharing: Forget the sharing soundbite at accommodation level and think sharing at a company and data level. There are specialist companies everywhere who are developing great mobile cloud-based tools that can be very useful.
Some are practical and assist in business necessities such as cleaning schedules and maintenance. Then there are the extras such as online guest books, real-time advice on travel situations, remote door entry systems, fridge filling and tours and local experiences among many. In fact, the startup competition at the VRWS was won by a guest experience app “hellhere”.
For any of these to work, however, they need booking data, reservation information and personal information. Marketplaces rule! Interestingly there was also the entry of Blockchain tech to the presentations, perhaps a means of future disruption of global marketplaces!
Those companies who do not have the resources or attitude to connect to suppliers of expert and the most dominant peripheral systems will see less interest in their core products. Those who choose not to share and prefer to keep all information within their own data silos will suffer.
However, expect the giants of the industry to keep watch and acquire the best but distance these brands to keep them as apparent independents much like the major hotel metasearch engines are.
Currently, the world of APIs (application programming interfaces), which provides a way for different systems to talk to each other, is expanding at a rate of knots as companies connect to each other and to the dominant OTAs.
In future data will continue to flow between systems for all manner of reasons, but this will begin to iron out the suppliers who can and those who can’t or won’t share connections. The inventory managers who cannot adapt will also suffer and become bait for the larger companies.
It’s a horribly imperfect world right now on data exchange, which will see more standardization on the one hand and then being disrupted on the other by niches and perhaps Blockchain.
After listening to Airbnb and hearing commentary on Booking.com, it’s clear that current ambitions are far above what could ever have been expected. HomeAway/Expedia was not present as the other big player in the game, nor was TripAdvisor, but they are losing ground by the looks of it. Perhaps we will see more consolidation soon!
Airbnb is creating a complete eco-system all of their own they control. Would it be wild to expect an unmanned car service with all elements of your travel controlled from your phone? Home pick-up, flight, stay, trip, eat, flight, airport pick-up, home…..review and reward.
Now showing a deep interest in quality serviced accommodation (e.g. purchase of luxuryretreats.com) supplied by managers, this is the only wrinkle in their full-service approach.
All bookings need an end to end service which needs to be secured quickly and all scheduled accordingly. Managers, certainly in regional destinations, are often better placed to ensure accurate information and instant acceptance and also offer alternatives in times of property problems.
After all hotel chains are now circling the alternative accommodation space. Hyatt , other such as Hilton and Wyndham already have resort experience and Accor owns VR businesses.
Say goodbye to “live like a local” and hello to the “full service stay” and new brands.
When is all the marketing is in the hands of multi-nationals and external services are supplied by contractors, organised via apps, then what is left?
Managers who have been undertaking all the needs of an owner including marketing, pricing, complaints, cleaning, repairs, filing accounts and more may need a rethink, especially the small ones!
Just cleaners then? Even that may not be the case. Sébastien Grosjean of BookingSync jokingly suggested robots can do that. He’s probably correct in a few years. It’s maintenance then, but even now some companies have their eyes on that segment, Keepe for example!
Imagine being a guest and turning up at the holiday home of your dreams. The lights are set to dim, the heating has been primed, your favourite music is playing. The coffee machine grinds some beans and starts to percolate.
The guest arrives, Alexa speaks up, welcomes them and then tells them the weather next day will be fine and ideal if anybody enjoys fishing, as the trout are on mayfly right now and a good time to catch them is early evening, just across the field.
How did that happen? No, nobody pitched up to do this prior to the guest’s arrival.
They were tracked on their phone, 20 miles away, estimating the ETA based on the traffic congestion, the home systems were set up automatically, the keyless door entry lock was set. The music choice and fly fishing hobby was sucked out of a commercial dataset that holds all your interests, likes and dislikes!
Not a person in sight!
The 25-year-old of today, who in 5-10 years buys a second home, may sign up to an OTA via his or her phone, take advice on furnishing from their deep data success stories, then purchase the furnishings from their recommended suppliers.
A recommended photographer appears and uses the keyless door entry system. The owner signs an online contract with the OTA, adopts the brand name under license, and pays the insurance fees and accepts the quality directives. Online listings are set up by machine learning.
All else is organised via the owner’s phone for all the other supplementary and practical services. Marketing is shared among 2 or 3 massive OTA’s, money arrives in owners account! They didn’t speak to a soul!
It’s a fully automated micro branded hotel! If Elon Musk has his way, it could even be on Mars!
Or perhaps we live in a decentralised world and the owner signs up to a network of marketing options, not just a big 2 or 3 OTA’s and all services are linked to these systems too.
Think of a world with a global and public database of holiday rentals, hotels, tour operators, flights and much more, which allows permissionless innovation of applications that can build by next Airbnb or Booking.com – however, it’s built and governed by the people, for the people with fractional fees. Disintermediation at its best!
There’s a company working toward this goal. They’re called Winding Tree and we suggest you check them out.
It’s a tall order in a world of big business. No wonder, with so much interest by large corporations hauling a growing world of mixed inventory into their silos.
No doubt about it, they fit a part of a mixed marketing strategy, so don’t ignore them! However, concerns on control, pricing, margins and terms mean there is little actual love in these relationships. Hotels have been facing these problems and now have a world of new businesses starting up to help them be in greater control. They even have their own Direct Booking Summit.
What else can be done apart from the usual advice on websites, smart payment methods, correct on-site messaging, great media? Get all these right but think out of the box and focus on the things large companies struggle with. Here are a few thoughts and businesses that can help to ensure the guests come directly to you.
This weeks post is about exploring the growth opportunities for owners & managers by focusing on niche markets.
It’s becoming impossible to compete with OTAs at a global level and this article explores why niche markets are the potential answer.
A 10min read exploring the term “luxury” in the vacation rental industry and how its overuse has led to different meanings. What does it even mean anymore?
This is a tough one as its all relative to who you are, your standing, experiences, wealth, perception, philosophy and beliefs.
The world’s 62 richest people now own as much wealth as the 3.6 billion people who make up the poorest half of the global population, according to a new study by Oxfam.
Undertaking another survey of this group, based on the perception of luxury, would probably see some surprising results, but overall, luxury would be a term that has a linear correlation to income. The lowest paid people make barely a $ a day, which would take them over 40 years to stay in the most expensive Savoy Hotel suite for one night or a “Luxury” villa for a week.
A case study of how 50+ UK managers have “pulled together” and created a successful niche listing site to take direct bookings for over 12,500 properties. Here’s how and why. Learn more and how you can get involved.
Do you belong to any Facebook or Linkedin groups, any social communities or specialist forums? If the answer is yes, then this topic may not only interest you, but it will help your business prosper, develop new skills and grow the value of your business!
All these social media sites rely on people working within the same environment, communicating, sharing knowledge, opinions, images and life’s experiences. In fact, you are all working together to make a successful community platform, they help you connect at a distance, you feed them information and build an ever growing data set from which they make money.
Take a step back and look at how these Unicorns are monetizing their businesses. It’s advertising, smart and targeted of course but it’s not actually an intervention into your business life, but it does make tools available if you want to enhance the opportunity.
A 10 min read about the rise of voice search, chatbots and the future role of artificial intelligence (AI) in the travel & the vacation rental industry.
Good Day Sir, Thank you for calling “Advanced Vacation Rentals”, would you like to speak to a human or a machine?
It’s an interesting thought. If by any chance you can find an actual phone number in the future, then perhaps the chat bot or artificial human at the end of the line will ask this exact question and qualify it with an option or two.
“Please note booking with an actual human interface will add 10% to your booking, you will find this at checkout under HSF (Human Service Fee). Our specialist, Silvia Turing, however is free and would be happy to speak to you, she is lovely and costs no extra!”
We hear and read a lot about “robots”, “voice search”, “artificial intelligence”, “big data” and the “internet of things”. So whilst the owners and managers of rental properties lie around pools, play golf or are fully V.R. immersed (that’s Virtual Reality this time) on the beaches of the world, guests will settle for a machine. They will be safe in the knowledge that Silvia will have all the answers and instill confidence.
The “machine” will tell them the type of linen they can expect, the local council’s parking charges, what the beach camber is like for safety of the kids, the best place to celebrate a birthday for vegans and recount the joy of paddling down the local river at sunset (but make sure the tide is in however).
Apparently, technology and in particular voice management combined with AI will change all this. It will help remove more of those expensive staff in the hunt for progress and in so doing establish levels of trust and connectivity via automated systems, which so far have been out of reach.
Voice search is the buzzword and will be far more specific because it’s still easier to speak than type. Bolt on significant advances in translation software and we are moving to a verbal digital environment that covers the globe connecting all of humanity. The varying cultural demographic makes this substantially more difficult of course, but the intent is there and with a lot of funding and innovation supporting this movement.
Imagine the non-English speaking part of the world coming alive through native, real-time translation connected via the net and the opportunities are boundless for travel, commerce, cultural advances and other less desirable impacts of course.
Most people do not engage at a deep and meaningful level with their current technology for search and still require answers to simple well-defined questions. Instead of typing “villas in Koh Samui” and scrolling through thousands of search results, it’s easier to ask “Find me a great villa, in a quiet location with… erm… a heated pool, hmm yes and make sure it’s close to the beach in Koh Samui… but… it must have 4 bedrooms for under $5,000 per week in November, actually… December”.
Voice search is predicted to be huge and is rising rapidly as shown in this Forbes report. Windows Cortana and Apple’s Siri are all entrenched in operating systems on desktops and mobiles but still suffer consistency and interpretation problems.
Once a search is completed for that ideal holiday destination and a few questions need answering, then it’s over to the phone or to chat online. Sylvia Turing (our future winner of the famous Turing Test), mentioned above, may be able to answer questions with aplomb eventually. This relies on deep data access and AI to provide a “human-like” experience.
In 2014 the pre-requisite 30% of people believed they were talking (via a type chat scenario) they were speaking to a 13-year-old. So it appears that it’s coming, albeit slowly!
Now add in hardware to the software challenges and we have a multiplicity of options. Amazon Echo, Google Home, are both novelties and great for playing music, asking personal questions and getting the weather forecast, but it’s the beginning. They will see screens added, perhaps VR equipment, translations and will hook into massive data systems. These will be commonplace in homes and can dive deeper into your personal life. On top of this, the other internet of things will have also curated you and your life, so predictive intelligence will come to the fore.
Your diet habits, bedtime routine, YouTube recommendations, salary, driving style, health requirements (let’s hope this doesn’t happen), family’s likes/dislikes and much more may be extremely well known. Confronted with this subliminal information, the optimal most personalised holiday destination, accommodation, restaurants, car hire and timing can all be offered up.
Whether this is presented as definitively as possible or is influenced by corporations sponsors or margin calls, will determine its real usefulness but can be considered “Connected Intelligence”.
Through conversation, we establish, build and strengthen relationships. A conversational interface is different and requires a seamless experience for the user. A simple chat bot or messaging system does not form a relationship or association. The goal is for the technology to disappear and for the user to forget about the interface. The system must be able to determine intent and develop through conversational association a trust acceptance level, let alone answer questions that may only be available offline. Doing this with language barriers, dialects, cultural nuances and technology barriers is not so simple.
We aren’t there yet by any stretch of the imagination and that’s where the traveler suffers. The industry is so hell bent on enforcing simple rules that can be interpreted without supercomputer machine learning and removing expensive humans from the travel process, it’s potentially the worst of both worlds right now.
It’s now possible to book a flight, take a remote controlled car to the airport, check in the bag automatically, collect a pre-booked car without speaking to a soul, check into a hotel or Airbnb without human interaction and return home the same way.
It’s unlikely the average person will be able to do this without issues on the way. Online promises are fine but on the ground, daily issues such as strikes, coups, traffic, weather, disease outbreaks, fires, road closures, terrorism, other travelers issues and more will affect the smooth running of any chain of travel activity.
That’s where problems occur as it often needs a human to sort the problems, but there aren’t enough souls to go around and they are generally overworked, socially removed and now quite angry!
Technology has exacerbated the problem, not solved it, sucking more from a decreasing labour force and applying tech to add more to the bottom line.
Ask why Facebook is so popular and so many people now use it daily. Humans are social and have a million years of personal interaction. The Chameleon Effect, for example, is a powerful tool in the war on automation. It does mean seeing the prey first however and the drive to distance connections in favour of revenue reduces opportunity reduces this.
Social has moved online and is developing. How many people do you see communicating by text, chat, WhatsApp, email these days rather than talking even at a close distance? Facebook is the prime mover in the western world for social networking and is a phenomenon that cannot be ignored in this context. The reason for its high usage and success also highlight Airbnb’s social and site profiling.
Millions of years of social evolution are being changed via human neural network adaptations and no doubt being imprinted on the human genome too.
The problem with all this, is that distancing human from human leaves doubt on identity & intent and means both sides of this social equation sees reduced trust and empathy. This is one of the reasons fraud has moved online. Humans can determine trust more accurately with actual real life interaction.
Right now, in an ideal world, it’s human for me. There is absolutely no doubt Silvia Turing will become more human and perhaps fool all of us, but for now, she’s a database of outdated information and no real world experience especially at a local and continually changing environment.
After trying An OTA’s suggested helpline number and asking for information on a small village property in Devon and speaking to an unintelligible accented person in the Caribbean we know that this is simply damaging a booking opportunity, if not the marketplace itself. This illustrates the need for true connectivity, not call-center incentivised screen read replies.
A 7min read diving into the “alternative accommodation” sector, looking at where & why the money is heading towards luxury villas & high-end properties.
Dreaming of a holiday? What is the first thing that comes to mind for most people? Perhaps its visions of warm sunny days by a pool or overlooking a calm deep blue ocean with white sands. In winter it may be snow clad ski chalet with wood burner and hot toddies after a day on the slopes.
The big corporations know this and are refocusing their attentions on higher value, luxury, family experiential accommodation. The arguably incorrectly named “alternative accommodation” description is gaining ground and bringing more traditional vacation rentals into the mainstream fold with all its corporate service support.