Vacation rentals have often promoted themselves as a more economical and personal lodging option compared to hotels. Often these claims are backed by hard daily rate data and thus it’s not a stretch to conclude the current economic climate may have less of an impact on the vacation rental market compared to more standard travel and lodging categories. In general I would agree that vacation rentals are more insulated from the economy compared to hotels, but like most things in life “it depends.”

Aspen Feeling the Effects 

I was able to attend an educational session held by Liza Hogan of Resort Rating Specialists at last week’s Annual VRMA Conference. Liza helps VR managers institute rating programs that help accurately market vacation rental units, but also provide structure and guidance to help owners invest appropriately in upgrading/maintaining their properties. As such, Liza is a recognized expert in the space and has collected data points and case studies across the country. During her presentation Liza mentioned Aspen, CO was preparing for a “down” season and was only at 50% occupancy for the holiday season as of mid-October. Typically, premier ski destinations, such as Aspen, are nearly completely booked for the holiday by the end of October. 

With most Colorado ski resorts within a 2 hour drive of Denver, Aspen’s western location (4 hours from Denver) doesn’t play well to the regional market.  Instead Aspen is a magnetic for the out-of-state family…. Thus, tack on a plane ticket, extra baggage charges (over $100 if you bring your gear on most airlines) and a car rental and suddenly you have a pretty expensive trip, vacation rental or no vacation rental.  Destination markets like Aspen are inherently vulnerable during these times.

Regional Markets Seeing an Increase in Bookings

In contrast, I had a separate conversation with a reservation manager in the White Mountain region of New Hampshire who indicated they had seen a year-to-date 9% increase in bookings. Apparently, many of the folks in Boston and New York are still planning on going skiing, they just aren’t going to fly anywhere to do it. As such, ski areas like Loon, with its proximity to several large cities, is yielding an increase in vacation rental demand.

Ultimately, vacation rentals, in general, will fare better than most travel categories in the current economic environment.  However, for every two markets that are benefiting from a change in travel plans/preferences there is likely another market struggling.

A few months ago my friends and I were planning a trip to Las Vegas. Being in the Vacation Rental industry, I decided to float a crazy idea out there about where we should stay – in a vacation rental! The reaction from the group was consistent and discouraging, “Renting a house in Vegas? Not staying on The Strip? Blasphemy!”. I had inadvertently touched a nerve that exemplifies one of the industry’s major challenges – how do we educate people to understand that vacation rentals are a preferable option to hotels?

Armed with a bevy of insider facts and figures I diligently went to work at swaying the group. I found a few great housing options and explained the benefits.

My home for the weekend 

Cost

Eight of us were going on the trip. For five nights we were looking at four hotel rooms at about $200/night on The Strip. Total cost = $4000.

The house I found was about $1500 for five nights. It contained ten separate beds across 6 bedrooms. Total cost = $1500.

Food & Beverage

My chosen house had a full kitchen and a 6-foot long grill out back. A quick trip to Costco on the first day and we’d be eating an assortment of breakfasts, lunches, dinners, and late night snacks at the house. Compared to the Strip’s exorbitant food prices and $7+ drinks, this was another significant area for savings.

Socialization

The reason we were going to Vegas in the first place was a reunion of sorts. We all went to college in Virginia together and have become scattered across the country over the last 10 years. Thus, it’s rare that we all get together and this trip was an opportunity for us to catch up. The rental house offered ample space for relaxation and entertainment. It included a beautiful pool, hot tub, pool table, poker table, big screen tv, and a patio with a gorgeous gazebo out back.

Location

This was the final barrier to entry for everybody (self included). The house was about three miles off The Strip. However, we decided that the rest of the benefits outweighed the location, and we took the plunge. Having just returned from the trip, I can now safely say that the location was not as big of an issue as we thought. We rented a van for about $300, and it was only about an 8-minute drive to The Strip. When the occasional taxi was needed it was a reasonable $20 trip. The van even paid for itself with all the airport pickups and drop-offs that would have otherwise required taxis.

Ultimately, we ended up spending more time at the house than anywhere else and everybody felt it was their best trip to Vegas ever. Vegas can be a grind of long hours with minimal sleep, but the vacation house offers a much-needed respite from the indulgences of The Strip.

While heading to the airport on our last day, my friend said it best: “You know, in a year I’m not going to remember the hundred bucks I won or lost at the blackjack table. But I will never forget how much fun we had at that house.”

In the past few weeks there has been growing discourse over the proposed bi-laws of VRMA and the future direction of the organization.

FlipKey has invested heavily in the promotion of the vacation rental industry and supports multiple organizations (VRMA, Discover Vacation Homes, CFVRMA, etc.) to further the collective interests of our industry.

To that effect, we felt it was prudent to make our readers aware of Alex Risser’s (President, Outer Beaches Realty) Save VRMA campaign.   Although this is not an endorsement of any particular party, we do feel it’s important our readers are aware of the emerging issues that are being addressed at this years annual VRMA Board Meeting.

This information is taken from www.savevrma.com where you can find additional information on the current issues, what Alex is proposing and your options as a VRMA member.

If you are a VRMA member you should have received meeting notes from last years annual board meeting, Restated By Laws of VRMA and a proxy vote form.  Please consult these materials to understand all aspects of this year’s voting issues, topics and positions.

————Taken from SaveVRMA.com————–

We, the undersigned, collectively urge Vacation Rental Managers Association members to give their general proxy to VRMA Board Member Alex Risser so that he will have the voting power to bring about some urgently needed changes in VRMA’s management and direction.

We believe that VRMA is our best hope of addressing urgent technology, political and economic trends that are threatening our industry.

We have reluctantly concluded that VRMA’s current management, while having done a good job coordinating conferences for our members, has done too little in expanding VRMA’s membership and participation in issues that are too large for any individual member, including:

• National promotion of vacation rental homes to hotel customers;
• Educating renters to differentiate managed from self-managed rental homes;
• Community restrictions on vacation rentals;
• The lack of a central industry website to compete with rent-by-owner sites;
• Legislative initiatives that would make flood insurance more expensive or unavailable.

Imagine your ideal vacation setting: a perfect 75 degrees with a slight breeze, a delicious summer cocktail in one hand, and in the other the remote to the stereo which you use sparingly while sifting through your favorite melodies. Though the sun is strong, you know that you’re nestled just inches from the pool and can dive into its waters instantly. You exhale, look around your backyard in satisfaction, and tell yourself for the hundredth time today that you’ve never felt so good about taking a Staycation.

Staycations, loosely defined by Wikipedia as “a period of time in which an individual or family stays at home and relaxes at home (or in one’s state), and takes day trips from their home to area attractions” are an up and coming trend that have risen largely from the recent soar of gas prices and weak dollar.  With gas prices reaching nearly $4/gallon and the US dollar struggling in the foreign exchange markets, the average American family simply can’t afford elaborate and distant vacations. Instead, families are turning to a more reasonable alternative, in-state travel.

As researched by Compete.com, over the past two years there has been a noticeable increase in in-state travel. Compete chose to examine the month of June, where summer vacation travel is at its peak, and found that in just one year the number of Americans “staycationing” rose from 8.7 million in 2007, to 12.9 million in 2008.

New York and New Jersey saw the highest volume of in-state travel, while Massachusetts, Pennsylvania, and Colorado boasted the top three spots in percentage increases from June 2007 to 2008, with Massachusetts at a 104% increase.

For property managers marketing vacation rental homes, the notion of staycationing should be exciting, as it can serve as a tool in promoting the advantages of rentals over hotels. Besides the most obvious benefits of in-state travel, staycationing aspires to be everything vacation homes represent: cozy, charming, hassle-free, and often more affordable compared to hotels.

“Forget hotels,” says AirBed & Breakfast, a company that helps people around the world network to find the next best affordable alternative to hotels (sans vacation rentals): inflatable air mattresses. If you’ve got a mattress, you’re in. Anyone can “post a room” on the company’s webpage, set a desired price for a guest’s night stay in their home (usually somewhere between $85- $100), sit back, inflate the mattress and let the guests roll in. While the rise of hotel prices has directly increased growth in the vacation rental industry, as a culture we are beginning to see a shift from the vacation norm to the vacation extreme, as these ‘alternative lodging’ options are entering the market.

Renting a room/air mattress is a simple concept, cheap alternative to a hotel and creates opportunity to meet and live with diverse people.  But lets be honest, we are a skeptical culture surrounded by legal and safety concerns. What about theft?  Or better yet, personal safety with the host you’re staying with? How can one be guaranteed a good experience when the mantra seems to be, “Just roll with it…”

Staying with a complete stranger no doubt requires a leap of faith on the traveler’s part, but AirBed & Breakfast does allow both hosts and guests to create profiles with photos, links to their own personal WebPages, as well as rates and guest reviews.  For those familiar with the long time successful, “couchsurfing” concept (www.couchsurfing.com), this should all ring a bell.

The “Couch Surfing Project,” launched in January 2003 by Casey Fenton and a number of other founders, after Fenton got a cheap ticket to Iceland for a long weekend with no hotel or hostel destination, and nothing other than his luggage, and well, his ticket.  Fenton ended up meeting students and young adults his age in Iceland and “crashed on their couch,” had the weekend of a lifetime, and thus the concept and later the company was born.

Ultimately, one thing in the current events of travel is clear: rising hotel costs is driving consumers to look for new alternatives, whether they be vacation rentals or air mattresses. Airbeds and used couches in strangers’ homes may not be for everyone, but for the traveler strong of heart, they certainly provide an interesting alternative to hotels.

I recently wrote a post concerning Itemized Charges Becoming the Norm in Travel which highlighted American Airlines, United and US Airways new policies of charging $15 each way for a traveler’s first checked bag and $25 each way for their second.

Today Delta upped the ante by announcing they are raising their fee for passengers’ second checked bag from $25 to $50 in an attempt to combat record fuel prices.  Delta does not charge for the first checked bag, but does apply increased fees for items requiring special handling (i.e. golf clubs, surf boards and skis)   See the Announcement on Yahoo here

I typically try to avoid checking any bags when traveling, but an upcoming golf trip to Myrtle Beach will require two checked bags.  The idea of shelling out an extra $50 each way for my golf clubs is not appealing, but what is my alternative?  The fact is, we as travelers often need to check in luggage and the airlines need to find new revenue channels to off set their soaring fuel costs – the two “needs” were bound to meet each other.   For now, its safe to assume itemized luggage charges will become a norm in the industry, so rather than complain I’m going to figure out how to cram my 3 iron in my carry-on.

A few weeks ago TripAdvisor announced it had acquired VirtualTourist.com. I will admit that I was not particularly familiar with VirtualTourist (VT), so I jumped on the site to see what they were all about.

After a brief investigation I realized that I “should have” known who VirtualTourist was.

Summary of Observations:

Based on Compete.com statistics the site attracts ~1M visitors/month. I consider 1M visitors the qualifier for “I’m a major site.” I’m ashamed that I wasn’t aware of the site prior to the announcement.

I’m going to Asheville, NC for a wedding in August and figured I would see what VT had to say about it. I was surprised to find a significant amount of tips, tricks and photos of avid VT users who had clearly spent a ton of time reviewing the area. Although the site has some user experience quirks, the user generated content featured is robust and very useful.

I then decided to register and discovered why users spend so much time talking about the trips. VT actually ranks users based on the volume and quality of the content they post. Their user-community basically competes to have a high “VT Rank” and thus members go the extra mile to upload extra pictures, videos, tips and deals.

Although VT had some great content on Asheville, I did notice it fell short in many other vacation rental destinations.  For instance, a search for “Outer Banks” and “Grand Strand” yielded no results.   With that said, I found excellent content for a number of other vacation rental destinations.

VT allows you to register as a resident of your area and then allows people to contact you if they are looking for recommendations.   With 1M visitors per month on this site, managers would be well served to register, use their local knowledge to enter useful tips, photos of nearby attractions and highlight the availability and advantages of vacation rentals in the area.

41 Million Trips Planned Avoided This Year

Waiting out an hour delay to take the red-eye from San Francisco to Boston on Sunday, there was no excitement or enthusiasm in the terminal – no one was looking forward to getting on their plane. Yes, all signs indicated that air travel was no longer a luxury affair, but rather a necessary annoyance, like a long bus ride, to get where you’re going.

OK, so it’s the red-eye – no one is ever excited for the red-eye. Well, it appears consumer dissatisfaction and apathy for the airline industry is deeper than that. A recent report from the Travel Industry Association (TIA) estimates that 41 million trips were avoided over the past twelve months at a cost of $26 billion to the U.S. economy. Adding a bit more perspective to this figure:

Roger Dow, President and CEO of TIA said “ . . .more than 100,000 travelers each day are voting with their wallets by choosing to avoid trips.”

We’ve written about airline travel on this blog before, because dissatisfaction with air travel has implications for the vacation rental industry. Less trips means less guests booking accommodations. Although the study did not highlight figures for the vacation rental industry, hotels lost an estimated $6 billion due to these avoided trips in the last twelve months.

Consumer Satisfaction – It’s Personal
Has the core offering of air travel changed that much? Sure, the seats are smaller and security is painful but the main transportation product is the same: fly where you need to go in relative safety. Instead, consumer dissatisfaction grows from the erosion of all the little service touches that made air travel unique. Personally, I miss the small bags of roasted peanuts (food always wins me over).

The personal nature of vacation rentals is the industry’s advantage. With a unique inventory of homes and a highly personal product offering (guests staying in someone’s home) that differentiates itself from other accommodations, vacation rentals capitalize on high consumer satisfaction (generally above 90%) to drive return guests and referrals. As vacation rentals continue to grow as a larger segment of the domestic travel industry, please don’t forget to sweat the small stuff and embrace the personal service touches that make vacation rentals a wonderful experience.

There is a recent trend in the travel industry to make itemization a standard component of the purchasing process. The airline industry is leading the charge, requiring passengers to cough up extra dough for everything from checked baggage to a soda on board.

American, United and US Airways recently announced that they are preparing to begin collecting a service fee of $15 each way for the travelers’ first checked bag and $25 each way for their second.

An email I recently received from United:

In the Vacation Rental industry itemized fees are already common practice, but can often lead to disgruntled guests if not properly communicated. For instance, some property managers in Florida do not offer pool heat as a standard amenity and apply an additional fee if the guests request the pool to be heated. The rationale is quite simple, heating a pool is costly – therefore the managers offer it as an option to save renters money that didn’t feel it necessary to heat the pool. However, consumers often have pre-established expectations of what is “included” in their lodging experience, so despite the logic of itemizing certain services, itemization can lead to confusion and complaints. (Click here to see a recent review of a guest upset with an itemized charge)

Personally I find itemized fees annoying; however, I will admit that I’m getting used to them. As I and the general consumer becomes less sensitive to itemization it provides a cost effective way for vacation rental managers to more efficiently cover certain variable costs/services. To avoid complaints and confusion (see example above) upfront communication of variable fees is necessary… Consumers will never like itemized fees, but as long as they know about them in advance you will avoid upsetting an otherwise happy vacationer.

In January we wrote about Travel Insurance and the details to be aware of before purchasing it. All in all, we determined Travel Insurance to be a useful mechanism to avoid ‘economic’ surprises while on vacation, but we were discouraged by the difficult claim process. In a different, but loosely related story, you may also remember our story on vetting the legitimacy of boat charter operator prior to a trip to Croatia. Having returned from Croatia I would like to revisit both of these stories to shed new light and a new found sense of appreciation for travel insurance.

Background

My family chartered a sail boat in Croatia to celebrate my brother’s 40th birthday. We found an amazing boat through a company called Navicula (www.navicula.hr). Navicula required a bank transfer to reserve the boat and crew. We were hesitant to send so much money over a wire, but followed up on various references and determined it was a legitimate operation.

Despite feeling confident in the company, we choose to take out a travel insurance policy through AIG Travel Guard just in case something went wrong.
Something Went Wrong

As we boarded our flight from Boston to Croatia we received an email from law@navicula.hr explaining that the boat had been damaged in transit and that they were canceling the charter. (Note: This is a true story). Navicula did not help us find an alternative charter, but through some heroic efforts by my sister in-law we were able to find www.lazywinch.com and its brilliant captain Paul Scowen.

The trip was amazing and we will forever be indebted to Paul and his hostess Tea for accommodating us on such short notice. (Read my review on TripAdvisor Forums here).

Paul Scowen of Lazywinch.com and hostess ‘Tea’ (Tee-a)

However, the story doesn’t end there. After returning back to the states we discovered Navicula had never refunded our money.

Final Outcome
After several emails and phone calls we finally gave up and called AIG to file our claim. Had we not purchased travel insurance the cost of our trip would have doubled. Thanks to Lazywinch, Captain Paul Scowen and AIG Travel Guard for saving our trip.