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You Can’t Do it on Your Own

Published on November 29, 2017 by

While trying to fight the same uphill battle that everyone in the vacation rental industry is currently fighting against the large Online Travel Agencies, one thing is becoming increasingly clear. There are only two way to get visitors to your site. There is the organic route, and the paid route.

 

While there is a somewhat level playing field in the paid route (at least on a per-impression, or per-click basis), the limited scale that the everyday property owner or manager has in order to compete against the large platforms and inevitably they simply cannot match up.

 

Let’s take a scenario where a somewhat successful property manager in a select market decided that they wanted to re-invest 20% of their net profit back into direct online marketing outside the OTAs. Assuming that this manager had 50 properties, each earning $50,000 per year, and a management fee of 20%, then their top-line revenue may be close to $500,000. Given that property management requires a very large overhead, even the most efficient manage would be lucky to keep 40-50% of this. Best case scenario, they may have a Profit of $250,000 and if they decided to re-invest 20% of this on paid advertising such as Adwords, they may put in upwards of $50,000 toward their paid advertising budget. Most keywords in the vacation rental industry are in the general ballpark of $2.50-$3.50 per-click, which may allow for as many as 20,000 clicks per year on generic terms, which may be increased all the way up to 40,000-50,000 clicks on long-tailed, and region specific keywords. This could be big business for a property manager with this large of a portfolio, this type of average income per property, this high of a management fee, and this efficient of operations to maintain this profit margin, but let’s be honest, that perfect combination of elements is not only rare, it is out of reach for many.

 

While we can all look at a watered down version of the above, we also must note that we have to keep some money left over to live on, and if there is not enough take home for the business owner and their employees the juice is not worth the squeeze.

 

For growing platforms in the industry, the same realties apply, and without substantial investment capital, these types of paid advertising campaigns are just as difficult to execute.

 

That means that for almost all users in the industry, we have to look at creative ways to market our properties organically. At vacayrx.com we are finally experiencing some success with this strategy, but an unfortunate truth has also emerged on this front. Anyone in this business who wants to compete organically through SEO not only must have a professional SEO firm offering guidance on how to best compete on keywords, content, density and overall strategy; but more importantly you must have A LOT of content to rank. While this may not seem like an immediate concern to most, the reality is that a small-to-mid sized property manager will simply never have enough content on their site to compete. Even the same successful property manager that was discussed above with 50 properties likely has no more than 70 or 80 pages on their website. Even if they are active with blog writing, detailed descriptions about their team and process, their location or activities, there is simply not enough organic content that can be generated in order to compete.

 

For a company like vacayrx.com we do have a bit of a secret weapon on this front. Because we are designed to be a nationwide platform, with the capacity to grow internationally, and with almost 3,000 live property listings, we simply have more content than even the most successful of property owners. This is a huge boost for us, and although we have been around for only about one year, given our size, we are already outranking property managers in select areas that have been in business for much longer.

 

Why is this all important? While the large platforms are doing everything they can to interrupt the direct flow between guests and property owners/managers it will become increasingly difficult to get exposure outside of their advertising channels. This creates a scenario where there is an extremely high level of dependency on these platforms and allows them to get away with making any policy changes that they want, whenever they want. It goes without saying, this can be extremely damaging for all parties involved, and as we’ve seen over the past year and a half, we are already moving closer to a situation where the everyday user is at their mercy.

 

All of which represents a need for users to unify and find strength in numbers. If an upcoming platform such as vacayrx.com can gain enough users, and the content on our platform increases significantly enough, not only can we compete with the larger platforms, but we can create a movement of defectors to balance out their abrasive and concerning changes. For more information, please do not hesitate to email us at support@vacayrx.com and we can not only answer any questions but we can also show you how to join the revolt against the OTAs and their underhanded attempt at controlling the industry.

Category: Uncategorized