The Big Shift: Breckenridge Rental Tectonics
The tectonic plates of the vacation rental industry has shifted more in the past 3 years than in the 30 before it. Some of the worst quakes happened right here in Breckenridge because the roots of the rental industry in this town are numerous, old, and very deep. The pressure had been building for about a decade, and it let loose in the fall of 2016. As a Realtor in this market, understanding what happened and how to navigate the new landscape will enable you to guide your clients to better choices in a vacation rental partner for your client.
Here are 2 examples in Breck that prove this shift is well under way.
- LeisureLink was a massive company that provided guest booking services to property managers. 18 months ago, they had half the rental inventory in Breckenridge – thousands of properties! They abruptly ceased operations September 2016 because it took them too long to produce bookings on the largest of the “newfangled” websites.
- Wyndham (NYSE: WYN) threw in the towel on 8 of their 11 home owners association contracts (community maintenance) in Breck due to their owners’ “lack of loyalty” (i.e. their lack of booking performance) with their rental program.
After 6 years of being the iTrip franchisee in Breckenridge, I won’t bore you to tears with my iTrip propaganda. Instead, we seek to help Realtors understand the new rules for vacation rentals now. Those 6 rules are at the conclusion, and sharing them will give your clients better rental results, whether they choose iTrip or not.
The old paradigm exists because hotels formed the basis for early vacation rental software. Is Breckenridge like Vegas, with large corporate hotel sites and nearly identical units? Not at all! How does hotel marketing software handle unique vacation rental units? Not well.
To illustrate, please click here. Ad on Booking.com by Wyndham As of this writing, there are apparently 3 units they are advertising that are available for the (mud-season) dates and guest count in the link. When you book, will you get the unit pictured? Are the pictures of one unit, or did they take the best photos of the best rooms in any of the units, and you just hope the software doesn’t book you in the ugly one? Granite counters or chipped orange laminate? All bunks or all kings? Are you OK with not knowing until you show up? Me neither.
A “site-level” paradigm works great if you’re in Vegas in one of 400 homogeneous rooms.
The “key-level” approach is the only sensible option for individually-owned and furnished properties – each with its own “key”.
With key-level listings, guests see only the photos, listing and guest reviews for the exact unit they are renting. It is welded together with the property manager that produced those reviews for that exact unit. If the rental manager changes on a property, the guest review count resets to 0 for the new property manager. Impeccable trust, integrity and credibility are all the basis for the stunning growth of this industry. Yay key-level! VRBO, HomeAway, AirBnB, TripAdvisor/Flipkey, VacationRentals.com are all key-level. Legacy hotel-only guest booking sites like Booking.com are not there yet.
Breckenridge, Colorado is the birthplace of the key-level concept! VRBO (VacationRentalsByOwner.com) started in Breck in 1995, when only 5% of the US population was using the internet. Back then, the rental managers in Breck focused on booking guests in the buildings where they had the HOA contract. Ah, the good old days with a semi-captive audience!! A big office on Main Street was the entrance fee.
HomeAway bought VRBO in 2006, but they obviously kept the site as VRBO.com. Then they started selling listings to professional rental managers. Wait, what? Vacation Rentals By Who? The website name no longer described what was really happening – yet bookings soared because now guests could go to one site with tons more choice and book and shop far more easily.
Inventory and views on VRBO/HomeAway grew a ton. Any rental manager enjoyed a sizable booking advantage to the property managers that thought VRBO was VRBOwner-Only! But in Breck it was especially pronounced, since about half of all the rental inventory in Breck was completely absent from VRBO.com. Then fall of 2016 hit like a freight train.
LeisureLink and VRBO/HomeAway finally got their software hooked up. Shouldn’t it have all been smooth sailing then? But it was too late. 21 years after VRBO started in Breck, LeisureLink was so weak by years of losing guests to key-level sites, they died. What irony! They couldn’t find a buyer, couldn’t make payroll in September, and they abruptly closed down. They pocketed the deposits from upcoming guest stays from their years-loyal property management customers. In any business, there is no mercy for clinging to the back side of a paradigm shift.
After LeisureLink’s implosion, their former customers got onboard the VRBO train in a huge way in Breck. The number of properties on VRBO went from around 3,000 to 6,000 during fall of 2016. With double the inventory, VRBO lost much of its marketing “oomph” in Breck. (see recommendation #1 below) Being on VRBO alone doesn’t get owners what their properties are worth due to all the additional competition. Many folks in Breck still don’t know what really happened, but you do!
The real reason why things have been so tough in Breck for some is the same reason why VRBO started here. Breck is hallowed ground for vacation rentals. The site-level orientation took root pre-internet when so many single-location companies grew very large here. But now the internet and has soaked through every corner of this business, and there are massive technology differentiators that really impact the owner’s financial results and experience overall. I’ll write about that next.
The below is a list of recommendations for owners to consider when hiring a rental company in the key-level market of today. The first four are a direct result of “the big shift.” The last 2 are just good guest service and owner partnership. I am aware of very large rental companies in Breck that comply with none of these 6 points.
The below will guide your client toward getting the best deal and experience in rentals!
The 6 Requirements for High-Quality Rental Management in Breckenridge Now
- Guest booking capabilities on all major guest web sites HomeAway, VRBO, Airbnb, Flipkey/Tripdvisor, Expedia
- Excellent guest review results determine property placement (page order) on guest sites
- Market pricing management tools, full market data access & the expertise to apply it
- A focus on rental management only, exclusive of HOA or other professional practice areas
- Property care is not a disproportionately large profit center
- In-house, competent and local staff that have a vested interest in the success of the company
Thanks for reading! Please email me, call me with thoughts, questions, ideas or good jokes!