The VRMA held in Los Angeles a few weeks ago highlights the need for change in a rather ironic way. The conference is held in a hotel (and the largest ever built in 1993), not a conference center where everyone could stay locally in a short-term rental, a vacation rental, a holiday rental, self-catering accommodation, serviced apartments, shared space, a micro or aparthotel.
With the massive escalation of rentals across the planet and the multi-model approaches to management, funding, and booking, the lines between property market segments are less obvious and more confusing.
VRMA stands for “Vacation Rental Managers Association”, with the keyword being “Vacation” and a rich history of regional membership. We can all go on holiday and stay anywhere of course. Some places are more attractive than others and travel opportunities have changed, so too have the demographics of travelers. As this industry grows should we look at differentiating the market segments into more discrete segments? If we do will this spawn more conferences, experts in their field and create specific technologies to support it?
It’s all “Short Term Rentals” (STR)
Any property that is rented for a short period could come under this generic heading. What that duration is may be questionable due to the local laws. 30 days and under seems appropriate. The restricted days rules invoked (and often ignored in cities) are sometimes avoided by use of 30 days + residential/business let rules, but one month or less seems appropriate. Any conference that is held under the STR banner can cross all rental borders except residential.
Urban Rentals (UR) aren’t new
It may appear a new concept, but serviced apartments and holiday rentals in cities have been around for a long time. The rise of Airbnb and the follow-on of BCOM (can we please all abbreviate booking.com to BCOM, as each time we create the full URL we may strengthen their network) have highlighted the opportunity across a wider spectrum of owners and investors.
Cities book shorter stays have more sophisticated travel networks and greater access to temporary staff. UR has challenged hotels and is seen as a cost-effective alternative, although I am willing to bet over 50% of the VRMA attendees actually stayed in hotels as they are more convenient at a service level and working with VR’s all day can be taxing!
Urban rentals are much more likely to be booked on an OTA (geographical regions apply), a mobile phone, on the move and at last minute. This affects tech, staff management, dynamic pricing, guest expectations, and very often property access. Serviced apartments can be included in Urban Rentals as they are predominantly focussed in high-density locations with 365 business and leisure interests.
Traditional “Vacation Rentals” (TVR).
VR is an American name and like much of the modified English language being spread across the planet. Holiday Rentals were almost certainly around prior to 15th century, as its just the exchange of money to stay in a home. Across the pond, it has been an industry for most of the 20th century and nomenclature in the English language has been centered around Self Catering (and cottages) in the UK (and New Zealand) and holiday rentals across Europe. There are of course lots of language variants such as “Ferienwohnungen” in German, or “affitti per le vacanze” and many other variants in Italy.
VR seems to have been left behind in the rush to create an eco-system where money is made from the business of scaling with cost reduction, smart technology, and aggressive online marketing. There is no doubt that many companies are approaching this segment accordingly, trying to standardize and develop brands (e.g. Vacasa), but the vast majority of inventory is subject to the vagaries of an owner’s individual approach to their property and millions of use cases. The regional, seasonal family holiday destinations are light years away from a London or Paris studio apartment that can rent all year round and see local service supply on demand.
The lines have definitely blurred and it still amazes me to speak to startups in the Airbnb host world, where they think renting is a new concept! This probably illustrates the diversity of accommodation and approaches and silos of experience. We all know many regional managers will try to avoid OTAs or use them sparingly but new owners or city concierge services rely on them. This demands different technical and marketing approaches and is something we have looked at in this post.
PMS vs BMS ~ Software is also segmenting
We have just published another article giving a preliminary look at actual physical property management software systems, which you would think would have an acronym PMS! Not true as most of us know.
If you look at Capterra for these systems and their (often self-rated) systems, you will see they only cover the basics of a true management system and they all claim that their system can do all things for everyone. The truth is that there are a thousand different business requirements globally and most only cover a % of the actual functionality needed. 90% of these 250+ systems cannot provide any level of true physical management software functionality. They are invariably focused on bookings, and financial management of such, guest automation and of course channel management.
Most all should be called Booking Management Systems (BMS)
This article will provide more background but real granular property systems need differentiation and are a specialist service all by itself. Unless the software schedules staff, allocates contractors, has detailed service and repair allocations, billing and owner modules etc it can’t be a PMS!