Attending the VRMA (Vacation Rental Management Association) European Conference is an experience that every property manager in Europe should go through. More than 400 people came together in Paris to create a new attendance record.
This was the third VRMA conference that I have been to, and each time I come back with fresh ideas, projects, new knowledge about our industry and stronger relationships. You can take a look at the 2017 findings here to get an idea of how quickly this industry changes!
As Your.Rentals was an event sponsor this year, I feel the need to share some of this experience with those who did not attend. Here are some of my key takeaways!
Vacation Rental Management Technology
The number of companies offering services to property managers seem to have multiplied this year – including vacation rental management software, channel managers, pricing management, operations software, insurance, etc. Each of these companies offer more options for property managers to improve their efficiency and processes. The whole market is growing, and becoming more complicated to navigate for smaller property managers.
Google is entering the ring to compete with OTAs (Online Travel Agencies) directly from a guest’s initial search. The introduction of Smart Home Systems, gadgets and software looking to automate some services and improve the guest experience is bringing new big players in the game such as Amazon on this war to “own the guest”.
The use and availability of technology is changing the rules completely and evolving the market in giant steps. Almost every presentation mentioned the words “Artificial Intelligence” which promises to help improve the earnings of property managers through smarter pricing to maximise occupancy and profits.
Organisation against rental regulation and bans
The pursuit to democratise the private accommodation industry and to put up a fight to ever stricter local regulations was another common theme. Many of you probably have felt the pressure from your local and national authorities to register your properties and learn new ways to declare and pay taxes.
There is a quest to unite and organise managers in Europe and in the world, providing them with tools and arguments to engage in the political arena and exert some influence on policymakers. If you are interested in this you can visit this VRMA webpage for more information or read about how you can participate using social media in this article by Greg Holcomb.
European market trends
The European market is forecast to be worth €45B in 2020, having reached around €34B in 2015. Almost half of the booking revenue generated in 2016 in Europe through rentals was sourced from online bookings. The OTAs and Airbnb are leading the online bookings in France, Italy, Spain, Germany and U.K.
Some of the most relevant key facts presented:
- Average rental stays are becoming shorter, as a consequence of the growth of city rentals market and less strict booking rules across the sector. At Your.Rentals, we’ve see the number of bookings grow dramatically while average stay has fallen from slightly less than 7 nights to around 5 nights – while average nightly rates have grown around 20%.
- Travellers are starting to consider private accommodation as a serious alternative to hotels – and much of the growth in bookings is in urban areas. This is a direct consequence of OTAs offering more and more private accommodation in their portfolios, a higher percentage of accommodation available for Instant Booking, and the guest experience becoming more reliable.
- The “rental by owner” segment is growing compared to “professionally managed”: more than 50% of European private accommodations are rented out by the owner directly – compared to less than 40% in 2010. This trend is forecast to continue growing and is understandable given the growing access to simple vacation rental management software such as Your.Rentals and the new generation of “young urban entrepreneurs”. However, we believe that tools such as Your.Rentals also help smaller local property management companies thrive and grow their business – and we have the case studies to prove it!
- One of the largest challenges to the industry in the next 5 years is supply growth – while private rental accommodation supply is growing at more than 27% per year in urban areas, growth in “Leisure/Non-urban” areas is sluggish at around 2% (while demand from guests is much higher). That is a clear opportunity for property managers outside of urban areas to be aggressive about taking on new inventory.
New vs Older generations of owners
At several sessions during the VRMA, it was clear that holiday rental owners and managers are divided into two generations with very different attributes that can help to understand the way the offer is distributed.
- There is a younger generation motivated by an entrepreneurship income as well as interacting with new people, renting their own primary home apartments or flats, for a minimum length of stay of 2-3 nights, as shared spaces in an urban context.
- There is a more experienced segment of owners who rent out their second homes, cottages, villas or condos located in more leisure-holiday locations, renting for a minimum length of stay of 4-5 nights with the purpose to cover their costs, upkeep their properties and earn some extra income.
Both of these segments need to choose the best method of vacation rental management: either by using a professional property management company, or managing themselves.
- Owners who choose to use a property management company, do so mainly because they trust these companies to bring more bookings, or they don’t have the time or experience to take care of the many aspects of vacation rental management.
- Owners who decide to self-manage prefer to do so in order to have major control of the rates and their guests, interact with them and save the management company fees.
There are also hybrid set-ups, where owners want to retain some control over the guests who stay in their property and have a say on who stays in their property, while allowing a property manager to fill in the gaps. If this sounds familiar to you as either a property manager or an owner, you need to be very clear about:
- Who is managing listings in each channel.
- Ensuring that you share the same calendar – which is updated in real time – to remove double bookings. A great way of doing this is using Your.Rentals’ Calendar Sync feature.
- A clear acceptable guest profile (if that is important to you) so that booking requests can be accepted by either party.
- Who collects guest reviews that can be used to improve booking conversion over time.
Your.Rentals is working on some simple tools that allow the owner or Property manager to both have access to the same calendar and also for both parties to be notified of booking requests and confirmed bookings – stay tuned.
I would like to invite you to share as well your experiences or questions on these or any other subjects regarding the VRMA European Conference. Please don’t be shy let me know your thoughts.