Worldwide: The third webinar in ShortTermRentalz’ new RockSTRz series was held last week with another set of expert contributors discussing “The rise of bespoke booking channels”.
Host Paul Stevens, editor of ShortTermRentalz, was joined for the third session of the series by Anthony J. Gantt Jr., founder and CEO, At Ease Rentals; Mateo Bradford, strategic partnership and business development advisor, At Ease Rentals; Victoria O’Connell, CEO and co-founder, Golightly; Nancy McAleer, co-founder, Florida Rentals By Owners [FLARBO]; and Frank Reeves, co-founder and CEO, Avvio.com.
As the RockSTRz session got underway, each of the contributors was asked for their experiences in the industry to date, why they had seen gaps in the market to launch their bespoke booking businesses and why these and other subscription models had grown in popularity in recent years and because of the Covid-19 pandemic.
Anthony Gantt began proceedings by describing how his company, At Ease Rentals, which connects vacation rental host to federal and military members and military families during official travel, had been borne out of frustration to change industry regulations. Since officially launching earlier this year, the company has initiated a crowdfunding campaign to get more users on its platform, which it is aiming to raise $500,000, and it has been named as a finalist for the 2020 MassChallenge Top Startup Competition.
His colleague, Mateo Bradford, suggested the rise of these types of bespoke booking channels was primarily down to the need to target new segments within the short-term rental industry, as well as the desire of owners and managers to have more control of their inventory, identify where their travellers are coming from and to diversify where their revenue is coming from. He added that the ability to reach managers and owners in that way is becoming more visible as the industry gradually matures.
Victoria O’Connell from Golightly, a private travel club for all women to list and book vacation rentals and home share stays within a closed network, expanded on the above by saying that the rise of subscription models had been accelerated especially since the start of the Covid-19 pandemic as guests and hosts alike underline the increased importance of security and accountability. On top of that, Golightly, which launched in January of this year, is able to people who are looking for extra levels of those features because it has integrated these as core values of its business to appeal to these niche communities, who had decided to shift away from major OTAs [online travel agencies] to platforms where they have a greater sense of familiarity, support and engagement.
Frank Reeves of Avvio, which aims to offer “innovative solutions” for hotels and serviced apartments, brought something of an outsider perspective [but no less relevant] to the conversation, including how the growth of such niche channels could be translated across the asset classes.
He hinted that the success of Airbnb had been driven by offering a unique source of content from 2008 and the supply of alternative inventory almost exclusively through one channel. Since then, the key to greater engagement, according to Reeves, has been increasing the level of personalisation across one’s platform to drive a more meaningful on-site experience for the guest, particularly as their on-site behaviour shifts dramatically with booking times shooting up and they spend more time considering and researching their trip choices.
The remaining bespoke booking channel represented on the panel was Florida Rental by Owners [FLARBO], whose founder, Nancy McAleer, was critical of how the high-profile OTAs had been “chinking away at control and making decisions for business owners”, which had inadvertently strengthened the “Book Direct” movement for channels to drive 100 per cent direct bookings or diversification beyond the globally-recognised behemoth platforms. McAleer added that businesses such as hers and other regional sites are able to offer travellers what they are looking for and giving them what they need, especially in such a vacation rental market in Florida where the number of rentals has doubled in recent years.
Following those introductions, the conversation advanced to what the vacation rental industry could learn from the hotel space with regards to the customer booking journey and cancellation flexibility.
Reeves was on hand to provide examples of how the hotel segment is marketing to its guests right up to the last minute and beyond as it adapts to the latest cancellation trends, where travellers are taking more time to research the best deals, and the hotels themselves do their best to increase booking retention after guests’ stays. On that basis, as flexible bookings get cancelled at the last minute when better prices come up elsewhere, Reeves believes vacation rentals should also be focusing more on the cost of acquisition of a guest, rather than simply on the acquisition of a booking.
Meanwhile, Bradford cited data that highlighted the rebound of the vacation rental industry, with guests now taking up the option to find the spaces that are most safe and relevant to the specific needs of families of federal and military personnel. The aspects of safety, space and good wifi connections are becoming increasingly sought-after commodities and booking drivers for millennial / Gen Z travellers which have grown up into digital nomads at the same time as the rental industry has seen its most substantial growth period.
In essence, specifically targeted channels, such as At Ease, believe that speaking to their core markets, rather than the masses per se, guests will feel more “at ease” because they can live in the knowledge that their accommodation caters to them and their standards will not be lowered. that speaks to you and not masses will be huge for businesses
While Reeves intimated that the Covid crisis had been a “massive reset” for the industry, O’Connell emphasised the lengths that Golightly had gone to in order to establish an extra level of accountability and safety, following a previous bad experience she had experienced as a host when a male guest had “trashed” her place and left her with a sense of “mistrust”. She said that the platform’s success had been built on the foundations of creating a branded community where all members had shared core values, as she revealed Golightly had grown to 5,000 members since its inception at the start of the year.
The conversation then progressed to more of a debate format with an analysis of the Book Direct movement centring around the following question: Is Book Direct a realistic strategy moving forward or is OTA distribution essential?
FLARBO’s McAleer, who had recently been a speaker for September’s virtual Book Direct Show, stepped up first to say that the movement had been essential to her company and for other bespoke channels, it had been a “great problem solver” for the industry in ensuring businesses remain in owners’ control.
However, she qualified this by saying that those who are new to starting up their own businesses in the space may not want to implement a 100 per cent book direct strategy as it is vital to set up one’s own website, be active on social media and research other direct booking channels to ascertain where one should be listing and where is trustworthy. In the meantime, it can take up to three or four years to build recognisable consumer awareness and owners need to gauge where they are at and how much time they can dedicate to the day-to-day running of operations.
On the other hand, Reeves, who had recently published a piece on ‘Beyond Book Direct’, agreed with McAleer that book direct was a “sound” strategy, he said its execution had got “confused” and warned of the dangers of “eroding” brand value and differentiation” by consistently sending out the same “Book Direct” message to the public. Instead, he said, vacation rentals [just like hotels] should lead with their unique selling points over their “unique distribution channel” in order to deliver a “more meaningful online hospitality experience”, otherwise one could risk being too dependent on the “brochure experience”.
Reeves also highlighted Google as a “great” disruptor to traditional OTAs, both in the hotel and more recently in the vacation rental space, due to its power to aggregate to aggregate across multiple channels. And yet, he suggested that future strategies for OTAs would come down to “how effectively they can create an ecosystem that does not rely on a guest starting in Google, where they have to compete with their products directly”.
While no one in the industry could doubt that there has been a proliferation of bespoke and niche-type channels in recent times, question marks still remain about their scalability and potential to be sustainable in the long-term; a matter the speakers went on to address head-on.
Speaking for At Ease Rentals, Gantt and Bradford said that they were “hyper-focused” on their federal and military entity currently in the United States, although it was a niche that it could replicate in other countries across the world. The former said that founders of bespoke booking channels had to become “culturally competent” within their niche and suggested At Ease would not stray too far beyond its core federal and military market as “those who get out of that and try and do everything, end up doing nothing”.
Similarly, O’Connell said that Golightly had already proved its scalability in its first ten months as a business, supported by the fact that everyone is vetted and it retains the community aspect it was founded on. On top of that, the company can continue to grow on the recommendations of those already within the network, who can bring their friends and family along with them and extend the reach of its community, thereby bringing people together who have the same passion and drive for their ideal, safe vacation.
In Florida on the other hand, which has a $33 billion accommodation industry, McAleer brushed off concerns that the likes of Google and other major OTAs would be able to swallow up the inventory of the smaller regional players such as FLARBO.
The crux of the matter, according to her, was making the most of the amount of travellers and space in the state, and channels such as FLARBO have a responsibility to scale it down to types in order to entice particular demographics of guests, such as those seeking out boat rentals, theme park rentals etc, and listen to the voices of the communities they are targeting.
Reeves provided a contrasting opinion, however, saying that as long as Google continues as a “top of wallet” brand at the top of the inventory funnel, channels should be considering how engaging their brand is and how their community can also be “top of wallet” when guests come to book.
The session concluded with an observation of the sorts of niche channels that could emerge successfully from the Covid pandemic.
O’Connell: “There is room for more bespoke booking channels out there – anything with membership, accountability and purpose will be able to drive growth.”
Gantt: “To be “top of wallet”, you have to build trust, safety and security by answering your community’s questions and ensuring you are the subject matter expert in your niche because you have the thoughtful information they need.”
Bradford: “One size fits all is not how what this business is like. Businesses need to have a strategic mindset into what makes sense and diversification can help with gaining a higher ROI. Niche sites have more flexibility in being able to draw into that and make things work for both parties, so it takes less time for more agile smaller entities to pivot.”
To watch the third RockSTRz webinar back in full, click this link to our YouTube channel.
The RockSTRz series concludes next week on Tuesday 27 October at 4pm with a discussion on “Around the world in 60 mins: What has the industry learned from the pandemic and what are the next steps for recovery?” Sign up for the upcoming session at this link.