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Looming Dangers Ahead for the Vacation Rental Industry

Published on March 22, 2018 by

While the cycle of news within the vacation rental industry usually drives periods of sentiment ranging from utter panic to general complacency there are some major obstacles ahead for property owners, managers and guests who are trying to navigate through the ever-changing waters.

 

Without question, the elephant in the room remains the “Match Back” policy which was announced late last year. While the knee-jerk reaction from property managers was strong, significant PR and damage control tactics were used to once again calm the room. However, as time passes, the likelihood of these changes impacting the market remains high and as seen in the recent article posted by Steve Milo of Vtrips (below) there can be some harsh consequences.

 

https://www.linkedin.com/pulse/why-property-managers-concerned-homeaways-match-back-policy-milo/

 

While some property managers remain optimistic that public opinion and backlash will offer a point of strength, we believe that this will simply not be the case. Given that the technology already exists within property management software to attribute prior guest information to current bookings, it is very likely just a matter of time before this changes from an option to a mandatory setting.

 

What will this do? This likely forces a large portion of the industry who have become reliant on two primary software providers to jump ship, begin looking at other integrations, and likely face costly and time-consuming changeover periods. While the belief may be that most managers will make this change, the reality is, that these software providers are banking on complacency and perceived reliance on their current solutions to retain the lion-share of their current user base.

 

In the future, it is believable that these providers will lose market-share, and have little appeal to those looking to enter the market or make shifts from current solutions,  the fact remains that this may be a very painful period for many who are not looking ahead. While we know that simplicity is paramount and systems are required to run a successful management business, it is our sincere opinion that you begin looking elsewhere.

 

The real problem exists that there is no telling where the data sharing ends. While software under the umbrella of the OTA’s making these announcements is obvious, the question remains about channel managers and other software solution providers who may or may not have written, legal, obligations to these OTS’s in how data is shared and when. This could mean that a property manager using a particular channel manager who is earning bookings outside of the large OTA’s may still find unpleasant surprises ahead as they receive notifications of heavy penalties under the Match Back policy. Attributing these bookings and the source of this guest information will likely prove to be impossible and yet again significant finger points and distress is likely to ensue.

 

Ultimately, there is one point that must not be forgotten. There simply is not 10% to give. If the Match Back policy is in fact instated in these ways and channel managers, and third-party software solutions do fall into this trap, the ability to continue profitable business practices is nearly deduced to zero.

 

For these reasons, we believe the best thing to do it to mobilize amongst one another and begin having the conversations with these providers to learn more about their obligations and what types of arrangements they have entered into with the large OTA’s.

 

This will likely be a defining moment in the direction that the industry will take and if the proper precautions are not made, one that may prove to be fatal.

Category: Uncategorized