Worldwide: The fourth webinar in ShortTermRentalz’ new RockSTRz series was held last week with another set of expert contributors discussing “Around the world in 60 mins”.
Host Paul Stevens, editor of ShortTermRentalz, was joined for the fourth session of the series by Jeff Hurst, president of Vrbo; Raj Kamal, CEO of OYO Vacation Homes; T.J. Clark, co-founder and CEO, TurnKey Vacation Rentals; and Maison Privee co-founders and managing directors, Paul Mallee and Rami Shamaa.
Attention immediately turned to the matter of the Covid-19 pandemic, and specifically the challenges each had faced during the year and solutions they had found to address them.
Jeff Hurst kicked off by referring to how travellers had been looking to visit secluded rural destinations in groups and families to “step away from the monotony of Covid”, something which Vrbo had been able to cater to and resonate with its customers.
After a year of upheaval at Expedia Group, which had seen the firm raise $3.2 billion in capital, phase out its HomeAway brand and face questions over its cancellation and refund policies, Hurst said he was “proud” of the tact that Vrbo had chosen in the best interests of its guests. He added that the opportunity to raise capital so early in the pandemic had allowed the vacation rental brand to accelerate the planned deprecation of the HomeAway brand in the USA and push out Vrbo in the UK and Netherlands so that more travellers could experience its offerings.
Meanwhile, Raj Kamal, who was only appointed as CEO of OYO Vacation Homes in June, said his “institutional wisdom” and the strong recovery of the vacation rental segment in the summer had allowed the company to withstand some of the worst effects of the pandemic thus far. This was illustrated in surveys the company had carried out which suggested business had been up more than 30 per cent on 2019 levels in September, with 80 or 90 per cent of guests choosing to drive to their vacation homes in that time.
Maison Privee’s Paul Mallee stated that the pandemic had not only triggered a rise in demand for extended stays [due to significant job and personal uncertainty] but it had also driven “huge” demand in villas where guests can be met with the natural seclusion they are now looking for to ensure their safety and “fully control their environment”.
Earlier this year, the company was also the first vacation rental business in Dubai to have been awarded the WTTC [World Travel and Tourism Council] Safe Stamp, highlighting its continued efforts to ensure the safety and security of its guests.
T.J. Clark spoke from a property manager’s perspective of the operational and logistical challenges at the height of the first wave, including call volumes jumping to ten times the usual levels and working to keep his team of 460 employees in tact. On top of that, he described how the team at TurnKey Vacation Rentals, which is active in 80 US markets, had doubled down on releasing new solutions to comply with new regulations, bringing in photo validation of cleaning products and participating in a programme to house first responders as they moved around the country for work.
As the conversation progressed to how customer behaviour had shifted since the outbreak of Covid-19, Hurst outlined the prevalence of drive-to-destination travel, shortening booking windows and the desire for families and groups to “trial” the vacation rental segment over more traditional alternatives such as hotels. Right now, he described how travellers have spent their time “dreaming” about their summer vacations ahead and Vrbo was positioned to capitalise on this surging demand.
Mallee echoed his thoughts, intimating that it is becoming “alarmingly apparent” to hotel operators that the private vacation rental sector is recovering a lot faster than the more mainstream asset class. His fellow co-founder Rami Shamaa suggested that this was prove favourable to the holiday home space’s long-term future as even the staunchest hotel advocates would at least have had the opportunity to experience a rental for the first time this year, which could potentially convert to a more permanent shift.
Another matter to consider in Kamal’s words was the fact that the desire for greater flexibility [bookings, cancellations etc] would lead to a renewed focus on brands that people feel they can trust, such as OYO Vacation Homes. Its Scandinavian brand, DanCenter for example, seeing a 137 per cent growth in bookings earlier this year is illustrative of this point, but equally cleanliness is seen as a clear traveller priority, with 90 per cent of its guests admitting it was the most important factor in their decisions to book.
When asked about where the vacation rental segment fitted into OYO’s overall hospitality growth strategy, Kamal added that it would be “very important”, as demonstrated by its recent acquisition of TUI Ferienhaus.
The growth and expansion of the vacation rental segment was a key thread throughout the hour-long session, with all panellists providing a bullish outlook for 2021 and beyond despite the obvious challenges.
While Mallee and Shamaa expressed their belief that there was “enormous scope for growth” in the sector, the pair and Hurst suggested one of the key words for 2021 would be focus as they seek to consolidate their brands and build consumer awareness for the space in particular to attract families and groups.
Similarly, Clark cited the “extremely strong demand” for vacation rentals he had seen at TurnKey. This was backed up by a 14 per cent YOY decrease in lead times for booking, as well as a 25 per cent growth in larger groups placing reservations at its properties during this period compared to 2019.
Understandably, those tuning into the webinar were keen to hear the contributors’ thoughts on emerging trends for hospitality and real estate as businesses seek to navigate the drop off in bookings during the winter months of the pandemic.
Kamal repeated his thoughts that flexibility would be at the heart of travel trends over the next 12 months and beyond, which was forcing companies like OYO to rethink and adapt their booking and cancellation policies to entice more guests. Equally though, he said that there would be a somewhat more intense focus on the end-to-end and in-stay guest experiences, as expectations for high quality stays soar among holidaymakers.
In the meantime, Shamaa and Mallee opted to concentrate on giving guests the “choice” for whether they wanted to be greeted in-person at the point of checking in or whether they wanted to minimise human interaction through contactless technology, such as keyless self check-ins and digital manuals. However, both were also quick to emphasise that the personal touch which the industry has been founded on would still be important in guests’ minds, particularly at the luxury end of the market.
To conclude the session, all of the RockSTR panellists were asked to provide their thoughts on the overall wider impact of the coronavirus crisis and what this would mean for the vacation rental segment moving forward.
Kamal: “One of the silver linings is that vacation rentals will become more mainstream as more people have the opportunity to try the segment. Delivering on the experience is key to long-term stability and success, and this will separate the winners from the also-ran.”
Mallee / Shamaa: “The pandemic has given guests the opportunity to try something different, something they may never have tried before. This will bring a degree of ‘stickiness’ to the services we provide and we don’t believe it will fall away.”
Hurst: “The biggest outcome from this is that we have done a lot of foundational work to really cater to groups and families and this has paid off. People will look back at this as a dark time in their lives when their lives were disrupted. They will remember the time they got together with loved ones and this will create a huge emotional connection with our brand. Celebrating time with loved ones will also become more cherished.
“The sector will always be resilient and owners will always come together to try to deliver the best experiences for guests.”
Clark: “Family travel will continue, contactless technology will stick and so will high cleaning standards. The companies that are poised to take advantage will be those that have invested significantly in tech infrastructure and can provide the best hospitality experience at lower operating costs.”
To watch the fourth RockSTRz webinar back in full, click this link to our YouTube channel.
We can also confirm that RockSTRz will return with a new series in early 2021. More details will be announced in due course and if you would like to be considered to participate, please reach out to us at firstname.lastname@example.org.