Keeping up with changes in the lodging industry
- Aug 7, 2018 | Heather Bayer
We live in an ever-changing world. As technology advances, making life arguably easier, systems and processes get adapted, amended, and in some cases replaced altogether. And we have to keep up, or get left behind as our industry progresses.
I’m part of the generation that grew up without the internet; I was in my 20s before we got our first word processer. Mobile phones were not on the horizon when I started out in the workplace and I treated myself to a new LP to add to my collection every month or so.
Then came 8-track and cassette tapes, then CDs and now even large record stores like HMV have closed up shop and we’re all using Google Play or Spotify. We walk into a room and speak to Google or Alexa asking for the lights to be turned on or for a weather forecast for the day.
My smartwatch just beeped and I looked to see a Facebook update from a guest asking about a late availability booking. I sent a quick text to the manager on duty to check the property was good to go, then sent a response on FB Messenger to the guest. Three minutes later the place was booked, payment received, and the guest was packing for vacation.
That’s a far cry from where we were when I entered this business.
While I feel privileged to have been an onlooker and active participant in so much change in the past 40 years, it can be exhausting, and I completely understand when I hear people lamenting the good old days of vacation rentals.
Those were the days when you could speak with guests and strike up a relationship before they ever booked; you knew their children’s names and they probably came back year after year.
For the most part, we’re done with that.
Guests don’t book a year in advance in most places anymore. They leave it to the last minute, want to book for a couple of nights rather than the traditional week, and would rather not speak to the owner at all. In fact, it’s much more like booking a hotel nowadays.
That said, as vacation rental owners, we need to get used to even more change coming our way, because it’s going to be unrelenting. We can’t afford to be complacent, adopt a head-in-the-sand attitude, and hope it goes back to the way it was because it’s not going to happen, particularly in the following three areas.
Online Travel Agencies
We’ll see more change coming from the OTAs as competition in the market grows fiercer.
While it’s become fairly common practice to rail against the unfairness of it all and hark back to “better” times, these billion-dollar industries have the upper hand when it comes to marketing our properties. They’re also constantly changing their practices, from cancellation policies to algorithms that determine where you appear in rankings.
As the OTAs jostle for the title of market leader, they’ll continue to make changes, test out the policies that work for their competitors, and tweak their systems along the way.
If you don’t pay attention to what’s going on, the first thing you might notice is a drop in inquiries, then a reduction in bookings. By the time you’ve gotten on board with the latest change it might be too late to make a difference to your season.
Follow the Facebook groups where these things are discussed – often at length. You don’t need to respond, but you’ll learn a lot. The Hosting Journey is a popular group where many owners share their opinions and thoughts.
“It’s a cottage. What do they expect?”
These words are commonly uttered by owners, usually in response to a variety of complaints, from mouse droppings in cupboards to dust bunnies under the beds or Wi-Fi that cuts out regularly.
These owners cling to the idea that anyone who takes a trip to the country should be prepared for a traditional rustic experience, and to expect higher standards is unrealistic. It’s a view rooted in a failure to appreciate how guest expectations have changed over the past few years, and how travelers will no longer tolerate substandard accommodations.
The basic expectations are for a property to be spotlessly clean, all amenities to be available as advertised, furniture to be comfortable, and for technology to be up to date. Beyond that, the assumption that service calls will be handled immediately and repairs carried out within hours with no disruption to a vacation is common to guests in most locations. Again, the “hotel-ification” of the industry is becoming more apparent.
It’s little wonder that the hotel industry has seen the growth in whole-home rentals and is getting in on the act. Mega-chains such as Marriott, Hilton, and Choice Hotels can replicate their hotel style service in a vacation rental setting, and meet the rising expectations. After all, they’ve been doing this for decades and their movement into the space is well-explained in this New York Times article:
“Most home sharing guests leave positive reviews of their experiences, but when they do complain, it’s often about cleanliness, last-minute cancellations by the host, problems with check-in or an unmet need at the property they have rented. The hotel companies say their private lodgings are vetted, outfitted and maintained to hotel standards. In addition, the hotels say, services at their lodgings are provided by company employees rather than homeowners.”
If independent owners don’t listen to guests, accept their demands for higher standard in both commodity and service, and bring their A game to every transaction, the writing may well be on the wall for them.
If there is one change we can be sure of, it’s in regulations and legislation. Few locations have been spared the impact of state, municipal, or HOA taxes over the years, and investors have to be very sure of their research before entering the industry in any capacity.
As the opposition to vacation rentals becomes more vocal and sure of its position on affordable housing and neighbourhood concerns, changes in legislation will be much more likely. This has been demonstrated recently in San Diego, where even the Mission Beach area that reportedly has 44 percent of housing stock available for short-term rental, has been given notice of a total ban on non-resident rental activity. Regulations are heading for the statute books in Portland, Seattle, various counties in Florida, and Gulf Shores, Alabama to name a few.
Being aware of current and pending regulatory activity has never been more important than it is now. While you might feel settled paying your regular lodging taxes, don’t take your attention off what might be legislated in the future.
For up-to-date information on lodging taxes in your area and to stay abreast of what may be coming, check with Avalara MyLodgeTax. Their State Guides will keep you informed on understanding tax compliance in your area, local laws and regulations you need to consider, as well as answer a range of commonly asked questions.
Remember: Nothing remains constant except change itself. Expect it, prepare for it, adapt to it, and you’ll be on a path to success.