ShortTermRentalz speaks to Rentl CEO and co-founder, Scott Drexel, about the company’s Powered by Rentl backend solution program, expansion plans and emerging trends in the vacation rental industry.
- You have appointed Richard Thomas as vice president of sales and marketing – what do you hope this appointment will bring to the organisation?
Richard has come out of the private jet industry and I think he brings a certain perspective around quality that resonates with the people who utilise our platform. Those who have a second home as an occasionally used property and want to leverage to earn income is something that they want to be treated with the highest level of care. I think Richard speaks that language from his experience. This high value asset is something that we’re being trusted with by the customer and so being able to convey that message from our initial contact is really important.
The other thing is scale and growth. We’ve built the model that can afford a large number of homes in a diverse group of areas. Having a message that can speak to second home owners in Lake Tahoe, Palm Springs etc requires really careful consideration about what people’s concerns are. That is the goal with bringing in Richard as we want to refine that message in a way that is digestible and he has done a phenomenal job so far.
- How does the Powered by Rentl backend solution add revenue to homeowners and property managers? How is it unique and different to what else is out on the market?
For a long time, some of the larger companies globally have understood that real estate agents and brokerages play a very important role in bridging the gap in the relationship between the vacation rental manager and the homeowner. They are often the first people that the homeowner turns to when they decide they are going to start renting out their home. The work that real estate agents have done to earn the trust of the homeowner and build the brand is lost unless you heavily involve the agent in the rental process.
The goal of the Powered by Rentl program is to give agents the ability to deepen their relationships with their clients by offering this service through a trusted partner like Rentl, without having to hire new people to manage this entirely separate business. We will effectively build underneath the brand of the brokerage. The vacation rental capability that runs entirely through our platform generates revenue in a direct revenue sphere with the brokerage and the agent. It combines the quality that Rentl brings with the brand and the relationships that the agents have with the customers
- What are your plans ahead for 2019? Have you got any plans for expansion this year?
The precise timings depend on a number of factors and the response we had from the launch of Powered by Rentl was so positive, it’s thrown our plans into the air a bit. Rather than carefully selecting markets, we’re finding the markets are almost selecting us based on the partners that have emerged from that launch. I think in the places where we have planned or are planning to go forward organically, they’re pretty predictable vacation rental destinations like Maui, Park City Utah, and Destin Florida etc. These are all places that have all been high on our list but to the extent that we have partners emerging in each of these areas through the Powered by Rentl program. Some of those will jump to the top of the list as it makes the launch in a new market significantly easier when we’re going in with a partner who is already well established and familiar with the various intricacies of that particular market. The places we end up launching in may change but the ones I mentioned, whether they’re organic go-it-alone launches or partnerships through the Rentl program, there are a half dozen or so that are currently commanding our interest.
- What do you think are the emerging vacation rental trends in terms of technology?
I think IOC will continue to offer an enormous opportunity but be fraught with a lot of distraction. A few years ago, we saw vacation rental managers doing things like putting tablets into homes but doing that is very difficult. A system of hardware has to be maintained and tracked, if it’s damaged it needs to be replaced and the minute it goes into a home it can get obsolete. There are all kinds of things like this which will force rental managers to act, whether or not that the return on investment is strong enough.
In the meantime, the technology that is emerging is so much more stable, from video-enabled doorbells to smart home assistance, and the programming around those has become so much more accessible. I think that will become more prevalent but obviously they will require a lot of capital. A traditional rental manager who has a portfolio of 30-50 homes might not be able to afford that sort of investment compared to larger companies. However, the investment is completely worth it if the technology is carefully considered and it enhances the guest experience. It makes the management process smoother and easier to get real-time accountability on the ground rather than having smart home technology with bells and whistles features.
- How can technology be a way of managing or limiting fragmentation in the vacation rental industry?
It’s difficult because I think it can have a dual effect. What is difficult for companies that are coming into the space from a technology angle is they only serve a narrow portion of it. On the one hand, there are so many technology introductions in the backend operating systems for traditional managers to channel syndication platforms to email marketing and those tools. I think technology runs the risk of creating this hodgepodge of dozens of different technologies so that no two managers are using the same suite of tools. That’s similar to a lot of industries like real estate, where there are many providers and every narrow subset of technology. The more that non vacation rental-centric companies like Google and Amazon continue to expand into that market and provide smart-home technology, they will consolidate many of the newer, one-off emerging pieces of technology due to the growing prevalence of smart home assistance.
On the one hand, technology can make the industry less fragmented as there’s more technology available, and on the other, it increases the amount of new technology products that emerge every day.
- Do you expect the number of booking channels to increase and diversify or will we see the consolidation of three or four in 2019?
In terms of channels themselves, I suppose I’m expecting them to stay as they are. Airbnb, Expedia, Booking.com and that family of companies are so ubiquitous in the vacation rental space that you’re either one of those major platforms or you have a niche offering to a narrower subset, like the luxury market or the LGBT market, adventure sports or green travel etc. The subsets are sufficiently narrow that they are probably serving their markets quite well already. In terms of your large directory sites, those incumbents probably remain the biggest, most relevant sources of bookings for vacation rental managers, however the more niche programs and booking platforms are really focused on experiential travel, so I think they will stay the same.
- Are you facing any particular challenges in the space at the moment?
The biggest challenge is introducing yourself to a new market. The first challenge is that it takes time to build up trust within communities so we have grown huge leaps and bounds in places like Tahoe, Palm Springs. The larger foothold a rental company has, the more inherent trust a potential customer has in the options available. The more present you can be in a market, the more you can shorten the time it takes to meaningfully gain traction.
In addition, the regulatory environment will cause quite a bit more deliberate action on our part and rental managers everywhere. So many companies have been reliant on travel and tourism as a source of revenue in their economies for decades and it’s nothing new. The increased visibility of the rental space and its growth have caused local municipalities to say they need to act. They say they need something to control this because it’s something that could spin out of control. There’s going to be a very deliberate approach as we enter a new market. The more professional managers with local expertise are accountable and have a set of standards that they’re willing to adhere to, the fewer instances you end up having where there are issues. We will look to partner with more local governments to find out about their concerns and position our product as a solution to the problems in tailoring it to ensure guests are properly vetted and homes are properly insured.
There are challenges on both sides but there are also significant opportunities to differentiate ourselves in the broader market.
For more information, visit the Rentl website here.