Revving up for DARM with Rebecca Ballart & Ben Coleman

Speaker 1: 0:00

We'll start the show in just a minute, but first a word from our friends at Reven Research. Do you find it challenging to allocate enough time to your revenue management strategy, or do you feel like you may be leaving money on the table for your homeowners but you don't know where to begin? If you're seeking support to enhance your revenue management endeavors in 2024, your search ends here. Reven Research offers a personalized solution that not only grants you and your team more time, but also empowers you with the knowledge to craft an optimal revenue management strategy. With more time on your hands, you can focus on the most important part of the business growth. As an official partner of Key Data, reven Research clients have access to the data and market trends that help you convert prospective homeowners onto your rental program. In fact, clients of Reven Research report growing their inventory by as much as 20%. Visit RevenResearchcom and mention you heard about them on the Alex Nanny podcast for a free consultation.

Speaker 2: 0:57

Welcome to Alex and Annie, the real women of vacation rentals. With more than 35 years combined industry experience, Alex Hussner and Annie Holcomb have teamed up to connect the dots between inspiration and opportunity, seeking to find the one story, idea, strategy or decision that led to their guests big aha moment. Join them as they highlight the real stories behind the people and brands that have built vacation rentals into the $100 billion industry. It is today and now it's time to get real and have some fun with your hosts, Alex and Annie.

Speaker 1: 1:34

Welcome to Alex and Annie, the real women of vacation rentals. I'm Alex and I'm Annie, and we are joined today with two smiley faces. We have Ben Coleman and Rebecca Ballard from Reven Research. So good to see you guys.

Speaker 3: 1:47

Oh, it's always such a pleasure Any time. Talking to you, too is just always a great way to start off.

Speaker 4: 1:53

You always make my day, ben, always laughing at me when I say my name.

Speaker 3: 1:56

It's just. It brings me so much joy, I'm just so proud of y'all and everything that y'all've done. I mean I know I say this every time I get on here with you guys, but just to just to meet you Annie what San Antonio at VRMA a couple years ago, and then to meet Alex at Women's Conference in New Orleans, and then to see where y'all've come it just makes me smile every time I think about it, you're very sweet.

Speaker 1: 2:18

A lot of great memories for sure along that path.

Speaker 3: 2:21

I'll never forget that oyster log we ate.

Speaker 1: 2:24

I was just thinking about that because, as we record this, it's Monday, November 13th, and we're preparing to go to Darman, the Women's Conference, and I was just thinking we had that amazing oyster. It was like a whole, I mean it was. It was. It was at least three or four, three or four feet long of oysters, and that was in New Orleans, but we'll have to see if we can find somewhere in Nashville that could maybe have that many oysters for us.

Speaker 3: 2:50

I don't know if we can find a cocktail bar somewhere in Nashville.

Speaker 1: 2:52

We can at least have we'll be able to find something, I'm sure.

Speaker 4: 2:55

I learned to start being in Nashville this weekend, but there are 700 churches and there are 699 bars in Nashville. Oh wow, had no idea, but there's a stat for you. So, leading, leading into Darman, we've got a lot of a lot of things to talk about. I think you know Darman is a great conference for people to kind of look at their, at their revenue management tactics and their education and really hone in on their skills and maybe talk with other people and see how others have done over the last two years. We obviously, coming out of COVID, everybody was really happy and the numbers look great. And then coming into this year kind of went and everybody had a panic button kind of all over the place. So we thought we would visit with you guys to talk about what you've seen this year, what you've seen in the markets, and then just and then we'll kind of dovetail into Darman what you guys are going to be doing at that conference.

Speaker 3: 3:44

Yeah, no for sure. I think that kind of a little bit looking forward maybe. First, I just I'm looking at pickup, I'm looking at the where markets are compared to this, compared to same time this or last year, this year, and also looking at where they ended, and I think we're really going to see demand normalize. I'm not saying in any way that demand is going to pick up back to COVID, but I don't think we're going to see the volatility that we've seen. I say that because I'm I mean we have access to a ton of data through key data in that partnership. But being able to look at where ADR is finished in 2023 versus where they're booking at 2024, I think we're starting to see our industry realize how price sensitive markets are. Yeah, I think we're starting to realize how poorly we priced further out, especially post COVID, and I think you're starting to see the industry fix that as well. But repeat bookings are at least in the markets that we're in, which is about every market across the country these days, you're really seeing pickup and you're really seeing an occupancy kind of be pretty flat year over year, which is great, I think, is great. Last year it was, for sure, down early and then kind of picked up. We were talking about this a little bit just for a minute in our kind of pre-call. The fact that June outperforms July and most markets has always shocked me. It perplexed me. I've never seen that before. I've never seen a time in the Panhandle of Florida where we don't sell out. We did not sell out before the July week this year, so I think you're starting to see it. Normalize. Rebecca's got some great things to talk about of kind of how to handle some struggling units, how to handle some underperforming units, but I think that demands normalizing. I think I feel confident in telling homeowners that as well. I think that it's a good idea to tell homeowners that to really kind of set their expectations for 2024. Now, I think that we'll talk about this later. The other thing I'd love to talk about is getting really good at technology. I thought Andrew Kitchell from Wheelhouse gave a great, great, great presentation at the Streamline conference about that, and I don't think that there is a better time than right now. We're coming into the holidays, we're going to be eating a lot of food on the couch, watching football at least that's what I did and hey. So let's get our laptops out and let's just start playing around on your PMS, let's start playing around on your pricing tool, let's start playing away in Turner or Breezeway all the different pieces of technology and internally we've grown a lot, and a lot of that is thanks to you guys, too, for referring us as many people as you have. We really, really appreciate it. But we really want to be a bridge. We really want to be a company that can help leverage your entire tech stack. I think that between me, rebecca and Kelly, we know about everybody in the industry and we want to help get you to the right person when something's struggling. We want to help with that customer service side of things. We want to help leverage Breezeway or Turner into more bookings on the front and back into GapNights. We want to help you use Wheelhouse to the best of its ability. We want to empower your homeowner relations team to truly have confidence to talk to homeowners, and that's really I think that that's my message for the next year.

Speaker 1: 6:44

And world peace. You guys are great. I think there's so many things that you are tackling and things that are not necessarily being talked about in the industry. We had this conversation a long time ago Ben probably a good couple of years ago about revenue management and marketing and how those departments need to come together, and I think in some companies that we talked to, we're seeing that done successfully. A lot that still have not quite gotten their hands around it. But I will say you mentioned you and Kelly and Rebecca. You know everybody. I think that that is accurate. I was just down in Gulf Shores, orange Beach, and got to meet several companies that they mentioned that they work with you guys and just sang your praises from the rooftops. So that was great to hear.

Speaker 3: 7:27

That's all, Rebecca.

Speaker 1: 7:27

Well, she's got a great reputation down there. I know that we're a good team. Yes, we're a great team. I do have one question that, before we start diving into all the topics that Ben named, you guys are in a lot of these traditional vacation rental destinations that have a good portion of repeat business. What about markets that don't have a lot of repeat business? I mean, if you're going to an urban market, those people are typically not rebooking for the same week next year. How does that play into things? And maybe Rebecca, if you want to speak to that and your strategies.

Speaker 5: 8:02

Yeah, I mean really with the urban markets, it's knowing what events are happening, knowing. You know, we've talked a lot this year about Taylor Swift and what she's done. She's got that second leg of her tour going. So, like our clients, we've got a client who is in the UK and we looked at his calendar and, sure enough, he has two bookings for Taylor Swift, one's from a US guest, one's from a Canadian guest. And he's like I never get, you know, reservations this far out. And he's like, do you really? I was like I will bet you $100. They're going to see Taylor, you know. And then she's coming back through and we are client who's in Miami. We were talking through that like hey, you got to get that dialed in. He's like no, it's. And I said it doesn't matter. Like Taylor Swift, miami, you can rent anywhere in Miami. They are coming to be in the presence of her whether they're going to be Right, Sorry not like it, you know. But it's knowing your sports schedules, it's knowing what championship games are what because there is a lot of money that you can leave on the table by letting those events go unnoticed Definitely helps with your booking windows, especially in those urban markets that are normally a lot shorter. Seeing that, you know, spread out, but it really is knowing your market and knowing what is happening when, when to hold rates, when to pull them in. If you know that this announcement is coming, like it really is making sure your marketing team is telling everyone that you can walk to the stadium from your places, that you know just really capitalizing on all areas, because that does become a game changer. Especially when you're having kind of a rough week or, you know, rough occupancy year, those events can really push you over the edge and kind of make up some lost ground.

Speaker 1: 10:02

How do you guys keep up with that? I mean, how do you keep up with the events and schedules and all these different markets?

Speaker 4: 10:08

Taylor's easy. She puts it out everywhere, so that's easy to follow.

Speaker 3: 10:11

It's a lot of client interaction. We have to give a lot of credit. Shout out to Wheelhouse they had their model has has really, really, really improved in the last year of picking those out and being able, since demand, being able to recognize demand for those and just automatically push them up, which helps us. I think the other thing, alex, in an urban market is understanding the difference of occupancy and ADR from weekdays to weekends. I'll say this We've been asking, keyed out of Ed and Wheelhouse, to kind of build out a weekday weekend occupancy ADR REFPA report for us and I know everybody's working on it. But I think I love urban markets because you can really undersell the market and undercut the market for those weekdays to really start driving that year over year revenue up. And then all of a sudden you still like, imagine you're coming into January, december 1st, with 35-40% of your budget of your forecast already hit. Now all of a sudden you can get much more aggressive on the weekends. You could push, you can hold longer and longer. I think that one thing I've just noticed from all of our urban clients is not really having a foundation and really being like kind of in reality of what a weekday is worth. A lot of people that we take from an urban market try to price themselves kind of at the hotel level but without thinking that you know, unless you stay three days you're really still more expensive, even though you're 20% less from our taxes, for our cleaning fees, from our fees, from all that and understanding kind of understanding it from the guest perspective of the total bottom line, not not just all of our line items, but understanding that $125 a night at a short-term rental for three days is more expensive than $125 a night at a hotel.

Speaker 4: 11:45

Kind of going off of that. I mean, really understanding your events is super important and I think again, it's a game changer and if people pay attention to a lot of times people just think they know what's going on but they're not really paying attention and really like working with their Chamber of Commerce or their DMO to look at events that might be coming in, that maybe they booked at a convention center property way down the road but you can get some you know some reservations off of that. But it's also important to understand your inventory and the dynamics of different inventory and we were talking about that off-camera like areas that are homes have a different booking pattern and a different type of guests than condo markets. So the pay-in handles are really great case study, and that is as well as the Carolinas. So why don't you give us a little bit of information or kind of like what people need to be mindful of when considering the different types of inventory that they're pricing?

Speaker 3: 12:32

Yeah, I think it goes back kind of like from I'll take it from the urban side of things. I think that understanding that a five bedroom house is not near as valuable Sunday to Wednesday as it is Thursday to Saturday, I think taking a very surgical approach at the unit by unit level, looking at what over-performed, what under-performed last year, making decisions that way and then definitely working with your chamber, definitely working with your DMO, understanding what's coming, getting ahead of that, and then I like to look at it as, okay, these events are gonna help me oversell or over-performed for my over-performing units, but I can also leverage that for my underperforming units to kind of push those up and to kind of continually just move them up. And I know Rebecca got quite a few things to say on this as well.

Speaker 5: 13:11

Well, I think it's knowing your market. We had a really great client who's down in Cocoa Beach and they were doing some market research and found that there was not a lot of larger homes for rent on Airbnb or Verbo. There was a huge need for that. There was literally a handful and so they bought a unit that can be throughout the week rented single units. They all have kitchens, they all have washers and dryers and all that. But then for far out we've been able to rent the whole complex and it has just blown their expectations on what you know weddings, family reunion, holidays it's done incredible. We're kind of like, hey, you want to buy a few more of those because we need a little bit more. And when they asked, you know we didn't know what people would want. Now that same model probably wouldn't work in destined because there are larger homes, there are a lot of inventory, you know, and those markets, so it's not as successful. So it's knowing what inventory is out there, knowing that those larger homes, if they're multi families coming, I mean my gosh, I don't have children, but people that have kids and are involved in sports, like it is like an act of Congress to get a family vacation with two families with kids that are in sports. To have the same vacation time like that's really difficult, you know. So that's where you see a little bit of difference with, kind of, the larger homes versus the condos. It's maybe one family. They're taking off work on Friday. They're, you know, gonna be there for the weekend and be back at work on Monday or Tuesday. So it's it's very different. Knowing, knowing your guests, knowing who your target market is, really does make a big difference.

Speaker 3: 15:11

I just mentioned because I know that you and Riley worked hard on this about the one-night stays for gas, like you know. All of a sudden it's like how do we not about this? To start with that down in Cocoa Beach and one of the largest ports for cruises in the country, and Rebecca, rebecca and Riley really worked hard. Rebecca, please explain what you did there.

Speaker 5: 15:26

I think that's another view to look at it yeah, so they're in Cocoa Beach in Cape Canaveral, which is a big cruise destination, and we were trying to fill some occupancy kind of in a slower period of time. And because Riley does own some other units, he was like how, what do you think about one night stays? And honestly I was, you know, kind of like Ben was talking in the beginning of calls like man, I don't know, by the time you had your cleaning fee and your your fee, I just really don't know if it's worth it. You know, can operationally, can you handle it? Yeah, we can handle it. It might help give our cleaners some more work. Okay, great, maybe try it on those units, that building that we were just talking about, since you own it, we'll do a trial and see what happens. And I have never been so wrong about something wow in the first week I mean it was, I mean three days they had 25 one night stay reservations and we just opened it up within seven days. It was wild and I was like what the heck is happening? And I'm looking and it's like a Monday, a Tuesday, wednesday not our premium nights, yeah and week. Neither one of us knew what it was. At first. I was like is something wrong? Like what did we do wrong? And they actually had someone on their team ask one of the guests at call and was like hey, you know what are you guys coming down for? And they're like oh well, this house, you know, sleeps, or this condo sleeps six. We're coming down for a family cruise and we would have to probably rent three hotel rooms so we could rent this one property. Our whole family could stay here. We're coming, we're flying in late, we just need somewhere to lay down. We're gonna be up at you know eight in the morning to go to the cruise terminal, and so that has been a huge occupancy filler for them, because we hold it in a certain amount of days. So they're still protecting the weekends, are still getting higher ADR, but it has come leaps and bounds for their end of month revenue. And so we actually have taken that strategy because we were able to use the data and show some of the other owners because owners here one night stay, they quickly go to party, quickly go to this and it's like actually these people aren't using your place at all. They're coming, they're sleeping, they're waking up, they're going to the cruise terminal like they're probably using a shower and that's about it, not using a kitchen, not doing any of that other stuff, and so from the business standpoint it's great margins. You're getting your cleaning margin, you're getting your reservation fee, your commission, you can do the math really quickly to find that it's very and it helped with those cleaners, it helped give them work during the week when it was a little bit slower. Now, obviously, not every market has a cruise terminal.

Speaker 1: 18:11

Taking the strategy, and to our client in Miami, charleston and any markets that have the houses, or you know, I think that the overreaching concept there is. Just, you know you got to think outside of the box a little bit. You've got to reach out to guests when you see something that seems like a kind of a strange pattern. If you were testing opening up one night, two nights, if you're getting demand for it, call those guests and see like what are they there for? There might be something going on that in this case you guys can really package that up into a nice offering for a family. But one of the switch gears, just a little bit. I know the last time you guys came on the show you talked a lot about the difference in homeowners that we're seeing now and how rates are explained to them. And you know just what's, what's happened in the last few years, that these homeowners that bought years and years ago that they wanted to either retire in these condos or leave them down to children that's not the people that have bought in the last, you know, five years or so. These people really want to know what the return is going to be. I just had a conversation with a gentleman, gonzalo, down in Miami and he reached out to me actually because he was saying you know, he just went to VRMA and he's like nobody's talking about cap rates and like you know these, these questions that we're getting from these potential homeowners that were going to list their property with us, but they are speaking a different language and they really want to know what that ROI is going to be on the property. But has that, has that shift in the types of homeowners? Has that affected your strategies and how you help the companies you work with and how they explain those things?

Speaker 3: 19:40

I wouldn't use the word helped, I would use the word probably forced to to to maybe adapt. You know, we've got a great mutual friend and Lauren made well up in Gatlinburg and I see her, I love hanging out with her in June and they are just great people. But he's got a big problem down. There are up there, excuse me, of real estate agents basically giving giving rental forecasts out that are 12, 15% cap rates that are not, that are not feasible right, yeah yeah, it's not like when that happens. It's a hard thing. It's a very, very hard conversation to have.

Speaker 1: 20:10

When you buy something for a million dollars that you're gonna make X on when you go, you're gonna probably lose money for a little bit yeah, and it makes the rental company look like they're doing something wrong when it's like no, you were just definitely, you know, over over, shown what the expectations should have been for it.

Speaker 3: 20:27

I've said it this way I think our industry like kind of separating short-term rentals from hotels, I think our industry gets hit with everything a lot harder. I feel like I kind of say it we're on the bottom of the totem pole inflation that gets pushed down, flight prices going up that gets pushed down to us, grocery costs going up that push it, that gets pushed down to us. And all of a sudden you've got a foundation with a homeowner, which really is a sacred relationship if you think about it. You know I've been saying this for years that we don't manage homes, we manage assets. I'm not thinking about the amount of money, the amount of assets that we manage and what they're worth, because it freaks me out, but it's in. I mean, it really would be in the billions of dollars. And you've got in Rebecca over here just trying our best to plug away and it's a scary thing, but starting that foundational relationship off being completely transparent. Yeah, I was a property manager, rebecca the same, kelly the same. We gave ranges and I would always give that bottom number something that I would hang my hat on now you have to.

Speaker 4: 21:26

Like you said, we work in a trust business, whether we're working with an owner or working with a guest. It's all about the trust, and I think that that that's the one missing component that I think the realty is bringing to the table, that we have to do a better job, and it kind of goes to full circle of, you know, losing what we are as a business like. We're trying to define vacation rental, short-term Real estate has gotten involved in muddy the waters and muddy the conversations and made those conversations more volatile, just all the way across the board, and so I think, as an industry, that's another piece of the puzzle that we need to pay attention to and we need to do outreach to real estate. I know that within Burma, within membership, one of the things we talked about is like, how do we talk more with, like, the association of Realty? They have all of these people out there that are selling all of this property that people are thinking I want to put it on rentals were great. How do we get involved in those conversations so that they're not overstating the rental incomes? Because, again, lauren and I've had that same conversation. But and I know exactly what you're talking about. We have it in the panhandle here all the time and I know lots of realtors. I love them and they're great people, but if they don't understand the business, they're dealing with pie in the sky and Best case projections to make somebody buy a piece of property and not really being honest and doing their due diligence to talk to a local Management company to understand what happened, and so again, I think it goes back to what we need to do as an industry is Outreach, not only to define us, but how we are perceived when people are trying to get in the business and buy into it and it really is.

Speaker 1: 22:53

It's in their best interest for the Realtors to make sure that they are leaning on a local company that's going to give them realistic realistic forecast, because I mean that whoever bought the house or Condo is never going to go back to that realtor if they had a bad experience and you know I mean, eventually it's going to come out that the realtor gave them the wrong information. So I mean it's in everybody's best interest to try and work with the local companies.

Speaker 3: 23:18

And I think Rebecca says really well about what she did at her previous job. Rebecca, just how you teamed up with real estate agents.

Speaker 5: 23:24

Yeah, well, and I think too it's about educating the potential buyer and the real estate agent about the first year. I think that's one of the most missed opportunities that nobody talks about how hard the first year is. Because the first year, whether they're coming on in the middle of spring break, so rates are already low, or they're they've missed the booking window window for summer, it's tough. It's tough getting on the OTAs, you know up the search, if you know what the reviews. All of that plays into year one. So I always tell people like this is a year two projection, this is not year one. We, we will reassess once we find where it lands, especially this year. Let's just markets operating a little bit differently and revenue operating a little bit differently. It's really. You have to have those hard conversations and if that means that that homeowner goes to you know a company down the street that gave them a projection $30,000 higher, keep that relationship, because they're gonna come back to you in a year when they didn't hit those numbers and know that there was someone looking out for them. And we've heard that countless times this this month, especially of people that said, hey, we, you know that projection you helped me with and they went somewhere else. Guess who's starting with us on January 1? And so there there is. There is, you know, a goal in that, and and being Transparent, and you might miss them the first time, but they'll come back, mm-hmm.

Speaker 4: 25:01

Absolutely. Again, it's trust and sometimes if there's conversations, I mean they might be awful. You might be like look, I can't get you anywhere near. You need to be. But to your point, rebecca, once they see that you were being Honest in the front end, they're gonna come back around asking them.

Speaker 5: 25:15

You know why are you looking to start to move if some we've had some clients that bring us revenue numbers and I'm like these are good numbers, yeah?

Speaker 1: 25:24

exactly what are you really?

Speaker 5: 25:25

I don't we're gonna take a hit in year one, like you need to tell them that this is actually not good. If ask them why they're looking to search, if it's because of housekeeping and they want you know better Maintenance or they want you know better communication, that's one thing. But if they're if all they're happy with all those and they're looking for more revenue, you have to be upfront and say that it's we don't know what's gonna be in 2024. You may want to stay put for another year, but if they have a pain point of one of those other things, sure, we would love to show you our laundry. We would love to show you what we're doing, you know, with communication, with our technology, absolutely, but I think again it's you know, like we've been saying over and over again. It's about transparency and its trust. It's being the local guy, it's all of the things that we preach all the time that gets homeowners to Continue to be on your program.

Speaker 3: 26:20

Yeah, and I think we all wish. I think we all wish that the rental market really cared what the real estate market was doing. And it just doesn't. Yeah, yeah, closest they are to each other, they don't talk to each other. They don't get along well. And when you've got housing prices skyrocketing like they have, you've got Inventory flooding the market. You've got coming off the best few years of our industry's history. All of a sudden, something's got to give. Yeah, exactly that going, and I think that, and Alex, to kind of kind of just kind of close the loop on this. You know it is a different buyer.

Speaker 4: 26:53

It's kind of that different buyer.

Speaker 3: 26:55

I want to call them investors. They may not have private equity money, they may not have be a VC firm, but they're. They're getting 60, 80, a hundred thousand dollars of their hard-earned, hard-earned money To invest something for their kid, to invest in something for their future, and they want to know revenue. They want to know what they're gonna make. I like to think and I think Rebecca does this as well as I've ever seen I mean we've got some clients that in their first meetings they did not know what ADR was, and now they are confidently talking to potential homeowners and they are being companies that are much larger for contracts, because they can stand up on the rooftop and preach their revenue management strategy Confidently and clearly explain it. And all of a sudden it's the transparency, it's the knowledge and the confidence and all of a sudden we've got clients. I mean, yeah, I mean she's just an adorable, adorable lady, she's so nice and kind, but now you get her a homeowner conversation, she'll take you down. And I think that and we've been saying this for a year or two now it's time to get good at revenue management. It's time. Not, it's not good enough anymore just to be good at it. You got to be, you got to explain it. And I think the last time we were on the pod, you know, we built our industry off, off cleaning people's houses and upkeeping assets. That was enough and it's not anymore. It's not enough just to upkeep the asset, it's enough. We've got to, we've got to at least build confidence in the numbers that we're driving to that asset.

Speaker 4: 28:16

Well, we're portfolio managers, like, just like someone who rent, you know, manages your, your financial portfolio. I mean, it's, this is part of that portfolio and you should be able to be, you know, be able to dig into those numbers and understand it. And I think your point about you know Giving the realtors kind of an education, like it again it's like we're all better together and if an owner has a better expectation coming into it, then the management company can focus on what they do best and you know, again, it's protecting the asset, running the asset, those type of things. But they don't have to be worried about, like, did I make you know, did I hit that revenue threshold for that owner? So they don't blow up and leave me. They wanted to worry about those little things because the expectations will be set at the very beginning of the relationship.

Speaker 3: 28:57

Agreed, and I love how you said that it we really are kind of financial managers and I mean, could you imagine calling your financial manager and asking them a couple questions about your portfolio? I'm not being able to answer it off the top of their head right, yeah, exactly. Hey, I think we need to have the same level of trust and keep this as sacred as possible. To go hey, you know I miss a homeowner. Look, let me just. Hey, I'm out at lunch. Hey, I'm over here inspecting a property. I'm doing one of the 95,000 things our clients have to do on a daily basis. I'm gonna get back to you this afternoon being able to pull the reporting are already having the reporting pull Just to go hey, I've already got this. I've been thinking about your asset, I've been thinking about your property. This is where we missed it. This is where we're gonna make up that revenue. I'm gonna grab some July revenue. I'm gonna drive occupancy in October to make up for it. But being able to confidently and calmly and concisely be able to talk to homeowners about that, I think, is I don't think that's an expectation that should not. That is too much to ask for. I think it's something that should be required.

Speaker 1: 29:54

Yeah, I don't think it's too much to ask for, and I think, actually, you guys we've heard some incredible statistics that companies that are working with you have grown their inventory by as much as 20% Because of the information that you're feeding back to them.

Speaker 3: 30:06

It's 22 and a half percent last year. That's the. I know that because I'm most proud about, Because I think that the goal of revenue management is not necessarily making more money year over year. Sustainable revenue management is having more nights to book year over year.

Speaker 1: 30:19

Yeah that's, that's incredible. Having that, having that information to Make sure that you, as a property management company and manager, sound educated and that you're the expert, that's really, really important and that you can speak to, whichever type of homeowner it is, whether it is somebody that's newer on this investment side or someone that has been in it for a long time and is not happy with their company but they might know the ropes a little bit better and I think you know the. The personas of these homeowners is important to you know. Take into consideration that actually might be an interesting topic for us to dive into one of these days of the different personas and how to speak to them on different levels, not just revenue management, but there's a lot of psychology that goes in our industry too. At the end of the day, there really is.

Speaker 3: 31:03

I had a great conversation with Steve With Steve Schwab and I think it was at streamlined in Scottsdale just about how he's like reading textbooks, about guest psychology. The person that books it feels pressure.

Speaker 1: 31:17

Yeah, the person that's getting it for everybody.

Speaker 3: 31:20

Hey, what can we help them out? And I just that's why I'm such a big fan of stays that he's he's thinking outside the box, he's going on the eBay, I think he's. I think he said he put on the eBay and he's reading like college textbooks, like I mean outside the box. That way, I think only only makes you better and only Better, and it's kind of what we, kind of what I said too, like we're coming into a great season to get better at technology.

Speaker 4: 31:41

So, speaking of getting better, we alluded to darman's coming up in a couple of weeks, and so we're all getting ready to be there. We'll be there for the women's conference and then, you know, for you guys will be there for a dorm. I think you guys have a couple of sessions that you're gonna be doing. Want you tell us a little bit about that?

Speaker 5: 31:56

Yeah, so I'm doing a panel about what to do when your market is not performing, so it's a lot of different perspectives, I think it's. We had such a great planning time, so it's only 40 minutes and we're sitting here going. How the heck are we supposed to fit all of the stuff?

Speaker 3: 32:16

in 40 minutes.

Speaker 5: 32:18

But I think that it's a lot of. We kind of tackled it as Dharma is a conference where you get to kind of go under the hood Like it's not just where you get to talk about these revenue strategies and you're like, oh, that's a really great session. But like, what do I do? Like what are my actual items to leave here? And as a revenue manager, that's how I left. A lot of conferences before Dharma was like, yeah, that person up there talked a lot about RevPAR and strategy, but nobody told me what I was supposed to be looking at or what I'm supposed to be doing. And so I think that Dharma has a great group of people. The RevPAR team is really doing their job as revenue managers to make sure that these sessions are. You know, people walk away with tangible items, that they walk away with knowledge and education, and that's something we're really passionate about is just helping people understand revenue management, because it can be really overwhelming, and that's something that we always talk about is making it digestible bite-sized pieces, and you said it well too.

Speaker 3: 33:31

It's like we all get to talk. We all, like everybody's interested in data and revenue management.

Speaker 4: 33:35

No, yeah, yeah. Well, and I think to Rebecca, you know to your point, like you do walk away from some of those conferences feeling like you were talked at, yeah, and you didn't. You were talked to, so it wasn't relevant. And the thing about Dharma is it removes all the other stuff that's going on. I mean, dharma has so many sessions that are all over the place, from marketing to revenue management to housekeeping to, you know, asset whatever. This is very specific and very focused and one of the things that I've always enjoyed about it is having been kind of in all the different pieces of the fast of the industry is that we can go and have a conversation about distribution. And it's not distribution and ugly word, it's not the OTAs are bad. It's not that you know, it's all just focused on direct. It's it's how you take all of these pieces and parts and make them into your special recipe. That's going to make the success for you. But everybody talks about it, everybody shares ideas. I mean I think some of the stuff that has been shared at Dharma over the years has been revolutionary for our business. I mean, look at the thing that wheelhouse has done, key data has done. I mean you know, there's just such incredible learnings that come out of that conference. So you're absolutely right. I mean, people are going there, they're getting to check under the hood, they're getting to ask questions, they're getting real time answers and feedback and a digestible nugget that they can take back to their team and be like OK, let's try this and we can do it.

Speaker 1: 34:50

I think for a lot of people it's like you know this might be an interesting topic to explore as well. But, like day in the life of a revenue manager, like, what exactly are you doing on a daily, weekly, monthly basis as a full time revenue manager, as somebody that's doing it part time, that you might also do something else within the company, and when does it make sense to outsource? You know some of this stuff, like when is it too much? Like what size portfolio does it get to that point that you need some extra opinions on how things are being done? But I think you know a lot of the roles that are within our industry are there. They're different in every company, but there's a lot that's still being developed and made up as we go in terms of what these core competencies and responsibilities are. But I think there's there's still some confusion about, like, what an actual revenue manager does full time and you know where, when that becomes a decision that a company needs to make.

Speaker 3: 35:43

I thought about it a lot. Actually, I think it's way easier to outsource revenue management. I would not outsource distribution. I would have somebody in the office that knows the area, that knows the homes, because data is data we can look at. I mean, that's when people ask us, like, how do you manage homes that you've never been to that city before? It's because data is data. But organizing the pictures, making sure this is done correctly, making sure it's correct and I think the biggest struggle that companies have is, Alex, what you said is they wear so many different hats All of a sudden. When do they have time for revenue management?

Speaker 1: 36:14

Right, exactly yeah, and I think a lot of like legacy companies. They will kind of take the stance that you have to know the area to do revenue management because you have to know the homeowners. You don't have to know what they're willing to take for a discount or not take for a discount. How do you guys overcome somebody that might ask you that question?

Speaker 5: 36:34

It's all about segmentation of your portfolio. I mean, we have a lot of tools. Key data and Wheelhouse have given us those tools where we can have unit groups or we can have tags that we can set up minimum prices. It's all about communication with the property manager as much information as they have and they can download it to us and then we can organize it in a way that we can move through pretty quickly. We have the price sensitive tag under our owner tag, so we know that those owners are. they want an occupancy based strategy. They want to see money. They know they understand it, they get it. Higher ADR is not what necessarily wins rep are. They know that. So we have a way to tag that out. That we know that those are the units that we can move and we can adjust, that we don't have to go and ask for permission. For now, on the ones that are a little bit, you know, have tagged for special owners and they are special case and they do some different things, we'll pull those reports separately and say, hey, these are the, the restrictions that they put on and this is what it's costing them. Because I do think that is the job of the property manager to, because they have the relationship with that owner to say, hey, I know that you really want this $500 a night, but do you know that the median average in the market is at $225 right now?

Speaker 1: 38:04

Right, right.

Speaker 5: 38:05

You know you have to push back because at the end of the day then we can say, hey, we did everything we could, right.

Speaker 1: 38:12

And it could be worth letting go of that unit, because I mean, if they've got 40 units in a complex and they've got one that is going to be a lot easier to work with, that they are willing to take what the market is going to give them. It's not worth keeping one that you're just having to jump through hoops like crazy, that you know you get one booking and you're taking a booking away from another homeowner that is much easier to work with and is better for your round purpose.

Speaker 4: 38:34

Goes to do you and makes me think we're talking yielding and strategy and you know we touched on. You know there's rates, there's your type of inventory, there's your, your policies, you know your restrictions, your length of stay, like the one for the cruise, but I think it almost goes. You have to yield your owners too. I mean, I think that you have to get into revenue, like we have to manage the owners again the expectation, and like is it worth the time to have that one unit if you're going to have to go through hoops all the time, like Alec just said.

Speaker 5: 39:05

Well, and we tell our clients a lot like you don't like. Yes, you respect your owners, yes, you, you, you keep that relationship, but you don't let your owners tell you how to run your business, because that becomes a very scary place. Then, when you start bending the rules for one, then you have to do it for another and all of a sudden your operations are upside down Everywhere Because you're doing this for that owner, you promise that to that owner and nothing is happening correctly. Adding new staff is difficult. So because Mr and Mrs Smith get these sheets and the Carson's, they get that and this and that like it is, you can't scale a business by doing those things. So we tell our clients a lot Like if you see those conversations happening when you're negotiating your contract, you have to set that boundary very clear, yeah, because nine times out of 10, it comes back to bite you in the middle of peak season, on a Saturday, when you are slam busy and don't have help to fix it. That's when has been like the same the wheels on the bus fall off.

Speaker 1: 40:17

When the bus fall off.

Speaker 5: 40:17

He teases me because I say that all the time about the wheels on the bus have fallen off, the bus is on the side of the road. But just being proactive about that and not being afraid to be the business owner, not being a like, you have to protect your team. You are protecting operations, you're protecting your revenue by setting expectations of how you run your business and not letting owners dictate how you run it.

Speaker 4: 40:45

Well said.

Speaker 3: 40:46

And I would add on to that. Just the last one thing I'll add on to that too, is understanding how much revenue you need to generate to make that unit profitable or to make unit profitable for you. Hey, if you're going to do $30,000 a year, you're going to take a 15% cut rate on it. Hey, maybe I don't want to take that unit because I'm going to lose money for you. And, like you start thinking about, like take Cassiola, take Orlando and Dennis and Michael down there, they for them to take on a new unit. It's not just like, okay, let's go fill it in and track I know they use track as a PMS let's go type these, let's go type it out. No, they're on about every platform, every OTA out there. You have to be there and so, all of a sudden, the man hours just to put a unit live gets very, very, very expensive. In understanding the profitability of growth, I think is huge. I think that you can definitely outgrow your. You can outgrow your profitability. You can take it on some units that, hey, maybe it's, maybe it's there, they're going to come, stay in it for six months. Maybe they're going to come, stay in it for three months, so they're going to give out fourth of July, spring break and Labor Day, Memorial Day to their kids and all of a sudden that $50,000 or $100,000 projection gets cut in half and all of a sudden your profitability goes down. All of a sudden your time goes up and you start really getting pushed and squeezed. That way, I think understanding how much money you need to generate to be profitable at a unit by unit basis is massive.

Speaker 1: 41:59

I would imagine one topic that is going to come up quite a bit at Women's Summit and certainly at Darm this year, is going to be really looking at your inventory and deciding what properties you want to keep on your program. I think there's a lot of companies in the last couple of years have just grown so fast because there was so much of a need for property managers, but because they were growing so fast they ended up taking properties that they would rather not have on the program anymore. But to your point then they're still having to spend time and it doesn't justify hiring more staff at this point. And Steve Schwab also has a great graphic about the different levels of how much inventory you have and how that correlates to what changes you need to make in terms of staffing to be able to support that. And there's some different. There's some levels in there where you can keep growing while you're not having to change things a whole lot. But once you get that from 50 to 75, 75 to over 100, 100 to 150, things start changing pretty quickly and sooner, before you know it, you've got 400 condos and you only want 250 of them. So what do you do?

Speaker 3: 43:05

It's a hard place to be as a property manager. To go okay, I've overgrown, I've got these 50 units, I want to get rid of. That's 50. Not fun conversations to have it. Just like I don't get nervous about a lot of things, I don't get anxious about a lot of things, I'm pretty free, free spirited. But when you got to start confronting people about this and like, hey, I don't want to represent your asset anymore, I don't want to represent your company from a revenue perspective anymore, they're not fun. So, taking kind of you know, kind of looking kind of more into the future, by the way, okay, I can take these units, but hey, in a year I'm gonna have to call them back and tell them I don't want them, let's just not take them.

Speaker 1: 43:38

That actually leads in perfectly. I did this session at VRMA that I'm doing again at the Women's Conference about Cathedral Thinking, and I think Cathedral Thinking can also apply to revenue management. We're talking about it more from the lens of building a brand, but revenue management is part of that brand. That, as you're building your business, you know. Cathedral Thinking basically means you know, taking that long range vision and applying that to how you're making decisions within the business, knowing that a lot of the things that you decide or put in place now you might not see the fruits of that for several years. But looking at your portfolio and that lens is definitely important.

Speaker 3: 44:16

So that's a great. That's great. I love that. I love that Cathedral, I love that. That just sounds so great. I've been in the bar business before I back ended into this business and it's like, okay, we got everything figured out, now let's just go do it a million times, exactly. But if you look at, if you like, take Apple, take Amazon, take, take the companies that have really done scale, you know, with billions in market cap, what do they do better than everybody else? They did the same thing well, every day and didn't care that they might not have been profitable to start with. Hey, you know what we're going to do. The same thing. We know this works. We believe in our brand. We're proud of our brand. I think that we. I think, too, that we need to be more proud of what we do, because, I am sorry, I don't think that you can tell me that being a CEO somewhere else versus being Lance or Elaine Stitcher is much different. You're managing a thousand different things. You're having to get your team to do the same thing every day. You're responsible for a lot, a lot, a lot of assets, a lot, a lot of money, and being proud of that, being truly, truly proud of that, that you're doing the best that you can and you know what. You're managing $500 million assets and you're doing it well and you take pride in that.

Speaker 1: 45:19

Yeah, and knowing what you really want to have for inventory on your program. I just met with Matthew Deal with Element Homes in Orlando a couple of weeks ago and he was telling us about his portfolio and they are all very high-end, large homes in Orlando, that there's a lot of homes in Orlando that have the game rooms and the pools. These are to the next level. These are truly, truly exceptional themed houses. Yeah, and he doesn't have to have 100 homes like that. I think I mean they're a smaller portfolio but it's a great business and they're picky about who they bring on the program and at the end of the day, they're happy with that. So it's not always just a quantity. It's about quality and living into your brand and the vision that you set for the company.

Speaker 3: 46:02

There's nothing wrong with having 50 themed houses in Orlando, and there's nothing wrong with having 400 condos in Destin. Right, yep, you've got to go. This is the route that.

Speaker 4: 46:11

I'm going to go.

Speaker 3: 46:12

Like when people ask me if I would ever get back in the property manager, like be a property manager again, I'm like God, no, it's so hard. I kind of joke around saying if I did, I'd take 201 bedroom condos of Panama City and just rent the heck out of them. Have as few cleaners as I can have, have them all next to each other and try not to work 60 hours a week. But hey, if you want 50 themed homes, hey, that's awesome. We're working with Alicia down at Fun Vacay and Destin and you know what? She sticks to her dang guns. Man, if you're coming into her program, she's going to go through your house and tell you exactly what to do to get it to her level, because she's going to represent luxurious homes. She's got branded water bottles, branded pens, branded playing cards. You come stay with her. It's an experience and you know what. You don't have enough value and you don't have enough pride in your house to get it to that level. Hey, sorry, you're sure you're a great person, but if you don't want to put the investment in up front for us to really bring you under our brand, yeah, it's just not a good fit. It just means this is what I'm going to do. I'm going to do the same thing for the next 20 years, over and, over, and, over and over. It's a very difficult situation. It's a very difficult business.

Speaker 5: 47:16

Well, and it plays into your revenue management strategy, because when you know your brand and if it's difficult, in short-term rental because everyone that we talk to is a luxury brand- and we love that but that word has been loosely used. And it's like okay, now some of our clients we look at were like this is your, you're there like you deserve the luxury brand. Your revenue strategy has to be a luxury brand strategy. You cannot be having 50% off, a hot deals, this, that, the other thing. If you are reaching for the higher end clientele, the higher end level of marketing, it all comes full circle with that. And now, granted, there is a place for everyone. Whether you are just across the street from the beach and you're a two bedroom little cute condo that you're clean, you may not look like you're on HGTV, but there is someone that wants to book you, there's a product for everyone. And so that's not a dig to anyone who says that they're luxury and they're not. It is. There is something for everyone out there. I mean, look at hotels. You've got the Ritz Carlton and some other hotels.

Speaker 4: 48:41

You need to know your lane.

Speaker 5: 48:42

You just need to know your lane.

Speaker 4: 48:44

It goes back to that statement of like people have, like the champagne taste on a beer budget. It's the same thing how you're pricing and your perception. Yes, and it is protection of your brand. You have to be true to your word and not try to undermine what you're trying to do the rest of the year. Yeah.

Speaker 5: 49:03

You don't see the Ritz Carlton selling rooms for $69 a night.

Speaker 1: 49:07

Right, exactly yeah.

Speaker 5: 49:10

But if you get $150 a night at the Ritz Carlton, I'm booking three. Like this is a great deal Like, but that's you know. You have to know your brand and we, you know, walk through this analogy with our clients, depending on what they love and what the whether it's designer purses or it's hotel, luxury hotels like. We use that example all the time. It's like you need to know who you are, then everything else can fall into line your marketing plan, your revenue strategy plan, how to get owners, how you. You know what your office looks like, how you operate, like that all starts at the top and comes down.

Speaker 1: 49:47

Absolutely Well. You guys know the business All the way around.

Speaker 4: 49:50

All around.

Speaker 1: 49:52

All different parts of it and we're very excited to very, very excited to see you at the upcoming conferences and we've got some, some fun things in store there.

Speaker 3: 50:00

Just say I did not take it to the women's conference this year, but I will be there to hang out. Oh, okay. Well, that was that was. That was one of the most fun conferences I had ever been at, like I mean, it was me and Andrew McConnell and then the guys I can't remember. Is it got to?

Speaker 1: 50:15

go yeah, yeah.

Speaker 3: 50:16

Yeah, it was just us and it was like and layered from a red sky, like I, we had a blast hanging out with you. Uh, we're going to pick some people up from the airport. We're going to have a big time with this. We bought, we've got some hats, we got some beanies, we got some buttons. We're going to have a big time at Darm conference and I know that my team I know Rebecca's excited, kelly's excited, we and always, always a pleasure whenever we get to hang out in person.

Speaker 1: 50:39

Yeah, absolutely, absolutely. Well, if anybody wants to get in touch with you ahead of women's conference or Darm, I would imagine after listening to this episode, some people have questions and they might want to maybe sit down for a coffee with you at the event. What's the best way for them to get in touch with you all?

Speaker 5: 50:54

Yeah, you can reach us on LinkedIn or on our website. Fill out the contact us at RevenResearchcom. But either way, linkedin or our website.

Speaker 3: 51:04

Yep, I would just. If anybody wants to get in touch with us, I would definitely hit Rebecca up. I don't look at LinkedIn a lot much and I've got probably about 300 emails that have already come in today. So, um, you know, reach out to Rebecca for sure. Linkedin, revenresearchcom Rebecca at RevenResearchcom, we're pretty accessible in that and yeah, we would love to. If anybody wants to set it up, set up anything. We'll pick you up from the airport, we'll grab a cocktail or a coffee or something and chat about Reven.

Speaker 1: 51:28

Sounds great. Well, if anybody wants to get in touch with Annie and I. You can go to alexandannipodcastcom, and until next time, thanks for tuning in everybody.