Welcome to Boostly Podcast Season 8 Episode 44.
This is a recap of my Facebook interview with Matt Landau of VRMB where we talked about the future of vacation rental.
Here's the audio for this episode:
Here's the video for this episode:
Timestamp
04:00 One bit of advice to 21 year-old Matt
05:00 Why Matt went to another country
06:00 Recommendations from Matt
09:00 The most important aspect of the future
11:10 Matt's thoughts on AirBnb
13:20 About Cottage Industry 3.0
18:30 Quickfire Questions
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Transcript from the Episode
Matt is based in New Orleans, Louisiana. He started to sense the direction that that city was heading with the crisis so he decided to take this chance to come up and be with his family in Maryland.
In terms of vacation rentals, Matt purchased his vacation rental business in 2007 in the historic district of Casco Viejo in Panama. A lot of people think that you could drive there, but it would actually take a long time and a passport.
Matt opened up the property in Panama one year after graduation, which was in 2005. He was probably 21 or 22 then.
One bit of advice to 21 year-old Matt
Matt thinks he fell into really good timing and positioning but follow the vacation rental path. In the early days. It was just getting started. Now even despite the fact that it has blown up. It's still at the very, very nascent stages. And now is a time if you want to start a small business. If you like the idea of hospitality. If you have access whether you know somebody, maybe your parents know somebody, maybe you put together a formal business plan and pitch somebody, now's a wonderful time to start a small vacation rental business.
Why Matt went to another country
This is actually a really good tip for people who are thinking about getting started. work in a destination that you love. That is the core of vacation in general, you need to really love the place. And if you don't love the destination where your vacation rentals located, you can't communicate that to guests. So it lacks the lustre in that sense.
So step one, make sure it is a destination you really love you want to share with folks. So in choosing a destination that you really love, that's a great start but also be firmly rooted in the legal situation. Because as Vacation Rentals have emerged over the last few years, certain destinations have become way less friendly than others. You wouldn't want to see is somebody investing a bunch of time and energy and money into a vacation rental business only to learn that vacation rentals are illegal in that destination, or that they're standing on the shaky ground.
Recommendations from Matt
Matt sold his vacation rental business, he is no longer a vacation rental manager as of about two and a half years ago. So there's none of the tools in that capacity that he is using today. But they have more tools at disposal right now than any entrepreneur in history. And whenever he sees people complaining about these tools, oh, Airbnb did this, oh, this company did this. It's like get over yourself. use those tools to your best advantage. Know what you are getting yourself into. Utilize the listing sites, they're probably the best gift to startups ever. And plenty of the most sustainable vacation rental businesses have them as part of their operations but do not become dependent on them.
The most important aspect of the future
Learning to create businesses that the culture tells us to sell, sell, sell, and win win win at all costs? What they don't tell you is that in that process, people inevitably feel like they lost. There's a tendency with small companies to try to act bigger than you really are. Maybe that has some positive side effects. But more often than not in our space, it has some downsides.
For Sykes Cottages, they're certainly not the Marriott. They're certainly not a company of that size. But because they are perceived to be in a big company, that's why they would they were in the news for all these people ripping on them for not refunding their businesses. And we know that running small businesses, refunding guests was ridiculous. Like if you had clear cancellation policy and you felt strongly you were in a fair position to keep that money. If you had refunded all the money, maybe you would go out of business. So is this just a survival technique? Maybe you just felt like it was the right thing to do. That is your prerogative, the biggest thing that you can do as a small business that has a family that lives in the area that has a dog is, share all of that, and be open about that. And let them know who you are, why you do this.
And this has to do both in marketing, how you're presenting your company, to begin with, but also in your correspondence with guests. Maybe even as a little rationale, when you're making your decisions. It's not unprofessional. To share a little bit about who you are.
Matt's thoughts on AirBnb
The message that Matt has been preaching now for five years at conferences is one of listing site non-dependence. He doesn't use the word independence, because we've seen that people actually need to use those listing sites in their marketing portfolio to propel themselves forward that if you can carry an OTA booking into a repeat guest, all you need to do is begin filling up the calendar and you will have reached something of a sweet spot, the dependency on an OTA has become exploited right now if you didn't get paid by the by Airbnb, if they universally across the board decided to refund guests and that was at your cost. That hurts.
And Airbnb likes to use the phrase partnership a lot. This is a partnership, we're in this together. People need to get over the fact that it's not really a partnership with that kind of behaviour. If you think of it like a, like a romantic partnership, your spouse, if somebody does something like that, to violate your trust, that's a serious problem. Like you gotta have serious conversations about that you don't just like sweep it under the rug.
This is a big reminder for folks that maybe these large organizations don't have their singular best interest at heart. It's not to say that you should completely cut the cord. But use it as a reminder, and back to the very first day Matt started sharing listing site non-dependence, the presentation began with a hypothetical question, what happens if your top listing site disappears tomorrow?
About Cottage Industry 3.0
The VRMA is Vacation Rental Management Association based in Washington, DC. They have a European chapter, as well. It's the biggest most organized industry association that we've got. This coming Tuesday, Matt will be opening their spring summit virtually, it was supposed to be in Chicago, but of course that's not happening. So we're doing it remotely.
Cottage industry 3.0 has been a slow hunch of Matt now for several years. It is a bold vision for the future of hospitality, with Vacation Rentals perfectly positioned to win. So the original cottage industry this took place in England, back in the early 1800s was comprised of individual cottagers out of their own cottage creating specialty items, maybe it was a textile and maybe it was a watch. Maybe it was a shoe.
Most of these cottagers had jobs in the field. So this was actually something that they did on the side because they really enjoyed it to bring them in additional money. They could do it from the comfort of their own home on their own clock. And they get to stamp each item with their own little touch of personality. This was the beauty of the cottage industry.
Of course, eventually, the machines came around. And a group known as the Luddites, began attempting to tear those machines down. They tried burning the factories, they killed the machine loom owners. But that didn't work. In the end, the Industrial Revolution made all of the cottagers obsolete.
So if you fast forward over the years, there has been kind of a brewing movement of small-batch businesses, artisanal companies who are doing things, not unlike the cottages.
Matt is bringing it up today to cottage industry 3.0 now, which really brings in the most beautiful aspects of the original cottage industry, the individuality, your own definition of success, doing things on your own clock, all the best parts of what those original cottagers had, but turbocharged, with technology that these predecessors never could have ever imagined.
And this goes back to our point earlier that we have more tools at our disposal right now to promote our vacation rental businesses than has ever existed. So we must utilize all of them possible to get where we want to go.
So the cottage industry is just this new kind of way of thinking about the future. Matt's hope is that it can act as magnetic north, for everybody who's listening to say to themselves, yeah, that is what I represent. That is what I want to achieve.
And when we have a gigantic group of diverse vacation rental managers all around the world who want one core thing, the same, that's when the community really begins to take shape. That's when we can all start singing as a unified voice. Matt's hope is that cottage industry at this very unique time brings that to all of us in a way.
Quickfire Questions
If you could be on lockdown with one celebrity or one famous figure this could be dead or alive. Who would that be?
What TV series or movie Have you had on the to watch list for a while now or is there anyone that you've recently watched that you could recommend?
What is the one thing that you've missed the most since being on lockdown?
Certainly travel. Food.
In the last 12 months, what has been your favourite purchase under $100?
Exercise ball
Is there any other podcast that you like to listen to?
Heather Baer. Sarah and T. Reply All
One piece of advice for hospitality owner who wants to boost their direct bookings
Create a report and calculate your ratio of direct bookings to OTA bookings year upon year as far back as you can go.
Know more about Matt on his website.
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