US: ShortTermRentalz spoke to Fetch My Guest CEO Vince Perez about how property managers can achieve independence from online travel agencies [OTAs] by driving repeat business and the main challenges involved in running a successful vacation rental business today.
- Please introduce yourself, the Fetch My Guest brand and the services you provide within the short-term rental industry.
“My name is Vince Perez, CEO of Fetch My Guest. We provide marketing automation services for the vacation rental industry, as well as newsletters and digital marketing. We’re very hyper-focused on the short-term rental industry and those companies that are branded are our target for this space.”
- What drove you to launch the Fetch My Guest platform and how does this play into your overall vision for the company in the coming years?
“Fetch My Guest was actually developed by accident. We run a pretty successful VRM [vacation rental manager] here in California and we needed to solve a big problem five years ago that still remains today. Many businesses are still heavily dependent on the OTAs [online travel agencies]. At that time five years ago, we were 100 per cent dependent on FlipKey / HomeAway and we had to find a way to ensure our brand resonated with travellers because if we could do that, we would be able to drive up some wonderful new business. More importantly, it would put us on a path to drive repeat business that we’ve accomplished today.
“In developing the platform, we saw it was working pretty quickly in its beta form, whereby today we drive about 98 per cent of our bookings direct which is incredible. It makes us very profitable and we have scaled out the business here in North America to other VRMs that are seeing the same thing. What’s been gratifying in this process is for property managers to see the investments in their brands and their outreach has been resonating with travellers. They’ve just been somewhat masked by the OTAs’ “aggressive” tactics in recent years but their brands are doing better than ever. They have some incredible differentiators which they can leverage to drive those direct bookings.”
- Your key differentiator appears to be what you call your “exclusive member driven vacation rental marketplaces – how exactly do these differentiate from the OTAs?
“This is part of the evolution itself. We have moved into vacation rental marketplaces that are member-driven through associations here in the US and the key differentiators are again nothing that’s new to the industry. They’re just not commonly used for some reason, like generating phone calls. Our ability to bring all of these networks together is driving higher conversions because many travellers getting are seeing the amplification of their brands into the marketplaces and they are picking up the phone and calling. This creates a higher chance of closing business but most importantly, it’s the most profitable part of the business.
“In less than a year, we’re seeing little things like that since we’ve had the marketplaces up and we’re seeing incredible numbers of people that are coming across our networks. The profiles of these are typically ones that have been around for at least five to seven years. They’ve been bookmarked by travellers, have wonderful guest excellence and they adhere to a strict code of ethics. This shows they are vetted and guests know that they comply with regulatory processes, that they deliver on customer excellence and that they are in good standing with the community. This benefits the travellers because there’s nothing hidden and they can communicate directly with the same independent vacation rental managers that will help them at their leisure destinations and hopefully recommend us in their network.”
- Is it possible to achieve independence form the OTAs? And if so, how will you go about doing this?
“Absolutely, we’re living proof of that. It’s important to note for the members that come in, everyone is at a different inflection point in their business: some have a 90 per cent direct booking rate and some are at 70 or 50. The last data I saw in the UK regarding online direct bookings through the OTAs was a 55 per cent clip whereas in the US, it’s about 50. The wonderful thing about what we’re doing with this network is that we’re getting tangible data about which OTA sites and leisure destinations are performing, so it’s helpful for our audiences because they see that they’re driving way more direct business than they already thought. They can see both the RoI on our newsletter services and the traffic for their other services, which is helping business.
“Therefore, independence is very possible. The mechanics behind it are fairly straight forward – you just need to be communicating with your guests all the time. We send two or three newsletters a month and we pinpoint specifically where we are sending them, which is extremely important for us. It keeps our brand out there, it informs the traveller of what is going on and it keeps them ‘sticky’ with the brand moving forward.”
- What do you envisage for the future of the short-term rental industry and how will professional experts with property management backgrounds have a role in shaping this?
“I think there’s an incredible opportunity for the independent property managers out there these days. It does require more work and strategic thinking, and most certainly a departure from the ways we did things before. If you look at the OTA model and where it fits in with what we’re doing, I always tell our members to use whatever channel works for you, whether it’s Airbnb or another, but you need to have a plan to drive direct bookings. The way the market is shaping up today, let’s face it, there’s a lot of chaos going on about now. You’ve got the mega property operators that have come into play, making acquisitions and growing, there’s been consolidation which I think is very healthy, Marriott has come onto the market which is helping to raise the level of professionalism that we’re going to see, Google’s starting to enter the space too so I think it’s going to create some more chaos for at least the next two years.
“On top of that, you look at property management systems [PMS] changing all the time into something more like the OTAs and again I think that creates an opportunity for the independents, whether you decide to grow or whether you just choose to be a strong brand in your communities. It bodes well for them in the future.”
- What do you think are the main challenges in running a successful vacation rental business today?
“Hands down, the biggest challenge is dependency. I travel quite a lot and meet a lot of managers that are scaling up quickly and they’re highly dependent on the OTAs. That’s a recipe for disaster. At some point, the economics will not work if you’re scaling a business and you’re highly dependent on them. If you look at the shift in commissions, that alone can put your business upside down, and unless you’re driving lots of services through that business, it’s going to be very difficult to stay profitable. I imagine too for those that are scaling and want to exit, you probably want to exit in strength and not in weakness.
“A typical scenario I would see is someone that has just got into the business and there are 10/15 properties that are 100 per cent dependent on the OTAs. They’ve invested in their brand but they have no strategy on how to drive more repeat business. That’s a real problem and something that I think will get flushed out as more entrants make their way into the business. The more established businesses have more of a handle on this and a plan to execute ways of driving bookings but if they don’t, that’s another major challenge.
“Any operator must have a strategy for repeat business, diversifying your distribution for whatever works well for you no matter what your inflection point is. You need to understand your market, the inflows you’re getting and you can make a decision from there.”
For more information, visit the Fetch My Guest website here.