CEO and founder of VTrips. Vtrips is a leading property management company with offices nationwide.
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The vacation rental industry is exploding. In 2021, the U.S. lodging industry saw revenues of $319.9 billion, which is expected to increase up 13% in 2022. Short-term rentals, both in apartments and private homes, accounted for about $57.7 billion. And the market share of short-term rentals, as opposed to hotels, skyrocketed from 10.5% in 2018 to 18% in 2021.
Some of the challenges I’ve noticed with vacation rentals are similar to any other hospitality industry: for a long time, the hotel industry was very fragmented. Not only were there a limited number of established brands, but wherever you went, those brands maintained their own particular set of standards, as there was none industry-wide. But now many hotel brands offer consistent experiences across locations. The Hilton brand has been synonymous with quality for more than half a century. In cities, countries and continents, the name alone represents a guarantee of excellence that customers can rely on.
Vacation rentals are a fast-growing, multi-billion dollar industry, and yet, compared to the wider hospitality industry, I’ve found vacation rentals are way behind. Like hotel businesses in the past, rentals will continue very fragmented, with a mix of small to large players, each operating to their own standards. It also remains a largely unbranded category and companies tend to provide a simple service without a unique or personal touch.
The result can be quite variable. I find that all too often the customer does not know what quality of service, amenities or experience they will get from the property.
Whether you work in vacation rental, hospitality or any other industry, chances are Hilton’s management principles can be applied to your business.
Create a unified set of standards across the board.
It may sound like a common practice, but you’d be surprised to know that it’s a rarity. While no two of your properties can be identical, the priority is to provide every guest, in every location, with an equally high-quality experience every time.
It can start with simple things like luxury bedding and smart locks. These additions may not seem like a big deal, but they can transform the guest experience and ensure brand consistency.
Develop a purposeful inventory of properties.
Hilton was able to achieve targeted inventories in all locations and create a brand that was a “home from home” for international travelers. Consider doing the same. This may mean building vacation homes from the ground up, with the sole aim of maximizing the guest experience at every turn.
Pioneer with new and innovative concepts.
Hilton was the first hotel group to install air conditioning in all of its rooms and was one of the first to embrace the kind of amenities that improve the overall customer experience. They even invented the world famous piña colada!
Look to innovate where you can. Smart locks were one such example. Another example is the idea of digital amenities, which allow you to offer guests a variety of travel experiences prior to their trip. This can be tours, passes and more.
Why guiding principles are the secret to success.
Whatever your business, a set of guiding principles can provide the foundation for long-term success. You don’t have to follow Conrad Hilton’s, of course. But for inspiration, look to pioneers specific to your industry. You don’t have to be an innovator to stimulate innovation.
Sometimes it’s a matter of looking inside (or beyond) your industry to see what improvements or changes some are making and what others may continue to neglect. I firmly believe that open-mindedness and a willingness to continuously upgrade best practices are the key differentiators that set companies apart. Without at least these two principles as the basis for your decision-making, an edge over your competitors can always be out of reach.
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