Today we are going to be talking about a very important part of all of your Short-Term Rental businesses. It's what powers it in the background. We're talking about property management software, otherwise known as PMS.
Timestamp
04:10 Introduction of Guests
11:30 Big mistakes that Short-Term Rental hosts make with a PMS provider
15:00 Anything that you could've done to make the hosts' lives easier
17:40 Decision factors for Short-Term Rental owners in choosing a PMS
23:00 About Keystone Awards
27:30 What is missing in our current payment providers
42:00 Quickfire questions
01:05:00 Know more about our guests
Transcript from the Episode
Introduction of Guests
David Jacoby is the President and Co-founder of Hostfully and they help you run your business in multiple ways. They have two software platforms that are stand-alones. One is digital guidebooks. And the other is core property management software. They like to call themselves a property management platform PMP instead of PMS because they don't like saying PMS over and over and over again.
They do look at ourselves as a platform that's connecting many parts of your business and integrating with many companies so you can use both products together. But we also have lots of clients all over the world who have another property management software and use their beautiful digital guidebooks on top of that.
Na'im from Zeevou started off managing Airbnb flat service apartments, he didn't even know it was a thing, then he found out there was a whole community out there doing the same thing. As soon as he left University and grew that business fairly quickly, and then got stuck with operational issues.
So he figured out they needed software, tried to find software, tried out various types of software couldn't find anything that affects the way they needed to. So that's how zebu started in the background, which is basically, he doesn't want to call it an all in one because everyone claims they have an all-in-one. So property management system, channel manager, Task Manager, staff management owner, guest CRM and etc. etc. Basically brings him business. And more recently, he had also set up an investment company to purchase hotels, to then run the whole vertical basically, fingers in all the pies.
Terry White has a vacation rental business and Florida's Gulf Coast and in the mountains of North Carolina.
He spent maybe 1000 hours demoing breaking down PMS companies and scoring them just it really started with what he needed to find a solution. So when he started looking, he has been through it so many times. He started documenting it and then it went back over. He went through the whole process again of interviewing every PMS again that he knew of upgrading their scores, and documenting the whole the whole process.
Richard Vaughton owned two sizable management companies. He is a co-founder of Rentivo, which is a software specialist company to the short term rental industry. They don't focus specifically on PMS systems, they connect to other companies, PMS systems, and provide a very sophisticated guest front end for 1000s of properties. They do build on top of PMS systems for those customers who've got growth companies who just can't find the right tools. He is a director of IES consulting, which has started with Eric Mason, just to help people out in the industry.
What does PMS stand for?
For Terry, it's the entire universe; everything starts from the PMS and goes up from there.
Big mistakes that Vacation Rental Hosts make with a PMS provider
David thinks there's too much enthusiasm right away, of people hitting the ground running and not understanding what they're doing. So it's complicated turning on a new property management software and migrating over. And you want to make sure you're doing the steps in the right order. Otherwise, you could mess things up significantly.
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Like if you, for example, connect to Airbnb right away, and you don't have your pricing setup from your dynamic pricing company, then all of a sudden, your pricing might not look the way you want it to be. Or if you don't have your payment processor set up first, you can't connect to VRBO, or your live booking site, because he can't take bookings.
So just making sure you're following through the steps you're working with that property management software with their onboarding specialists. And it's you know, make plan to do it in a time where you can have a few days you can have a week, where, you know, maybe if you don't have one booking right away, it's it's okay because it's a little complicated. If you're on booking.com. And you need to get off, especially if you're doing a migration, if you need to get off your existing property management software and and move over, there's going to be a time where you got to disconnect and configure things in the new software and get it right. So just take a deep breath.
Na'im thinks it's refreshing to hear what he thought was maybe something unique to the complexity that they've managed to make a mess of Zeevou. He often finds that people will, they'll sign up and they'll expect all the automation that we can provide to just work. And like Well, yes, but not quite, because you actually have to tell the system, how you want to automate processes for your short term rental property, right? Everyone wants to do things slightly differently.
There's a lot of knobs in return after them all in the right way. And it's not enough to just sign up, it's not enough to sign up and pay for the first month, you actually have to spend some time in front of a computer, you can't set it up on your mobile phone.
No, you can't even when we will have a mobile phone app, you'll still need a computer to actually set the system up to start with. So things just that patience. And as David was taking the time to actually do it, and do it right from the start, don't get going with one aspect of the system. And then a month later realize, Oh, actually, now this isn't working. And it's because he actually didn't do the other two, three things that you have to do.
Anything that you could've done to make the Short-Term Rental hosts' lives easier
The single biggest mistake that Terry sees people make is when the first thing when that it's the biggest red light, as soon as they say they only want something that will do this, this and maybe this, it's picking software that you can't grow with, like you pick it, you use it for a year you outgrow it, you just and you know right away when somebody says I only need this, this, and possibly this, that they're coming from spreadsheets, they have never used software in their life.
And then one year after they would have the exact opposite philosophy. If they were doing it again, they would say I bought the biggest and most robust PMS I can afford. Terryy would say for sure it's it's going to small and not being able to grow with your PMS.
For Richard, it's planning, it's something no one actually thinks about. This is a piece of string of PMS. And it depends whether you're a single host. With one property, you just want to be on Airbnb or your manager with 500 properties, who wants to distribute everywhere and have multicurrency and everything else, you actually need to write down.
When you've taken on a PMS and you before you take a PMS, you need to write down a list of exactly what you want it to do and what you think it might do what you think you might want to do in the future.
Decision factors in choosing a PMS for Your Short-Term Rental
For Richard, it depends on who your customer is. First of all, who you're looking at, you're looking at an urban manager with two properties or a single host or one property? Or are you looking at somebody who's got an enterprise level growth business? Because they are wildly different?
For David, at a high level on the PMS should not define your process.
But rather, the other way around your process that you have in place is every property manager that? Have you seen the operations for one property manager, you've seen the operations for one property manager. So so their process should define the property management platform that they're going to choose? So they should, you know, take a pen and paper out and sketch out what is important to them and how they're going about doing things? Dynamic pricing, or cleaning or insurance, digital guidebooks? And then what are they going to get out of the property management software versus what are they going to use to integrate?
So taking that one, one clear example if they are using price labs or beyond pricing or wheelhouse and they love that then the pricing features and flexibility within a property management software is less important because you're doing all the configuration in in price labs are beyond your wheelhouse. On the flip side, if it's a smaller property manager with three properties, maybe they have their own cleaner and they don't have complex cleaning needs, so they might not need a breeze way or a properly or a turnover b&b. So the property management software, what kind of basic cleaning module do they have? And does that work for them, and they don't need a complex cleaning module. So understand what their process is, and understand what other software they're going to use in the property management platform is almost the lastest decision.
Everything should fall into place make that decision easy. Once you figure out what that process is?
Na'im is disagreeing. For him, a lot of people in that size, don't know what they want.
They don't know what they need. So we have people coming up saying, I want to automatically process the payments for booking.com. And they say, they don't do that. That's how they do it. They don't want you to do it your way. So 3d secure links are a must if you want to avoid chargebacks. Now, you might not know it, but you need it. So in some aspects, Na'im agrees that you shouldn't be adapting your business too much around limitations that a PMS has. But you should be able to detect when a PMS is actually guiding your business along the path that will allow you to grow sustainably and safely.
Richard completely agrees with both of those statements, actually. But it sounds like what you've just constructed is somebody who's new to the business, they've got some properties, they want to start in this business, and then invariably starts with the same question.
And it is, well, I need to get bookings. How do I get bookings? Oh, well, I'll just put it on booking.com, VRBO and Airbnb and I'll get bookings. So I don't need to do anything else do I. And as as we're just seeing, this is a piece of string.
So you know, the synchronized inboxes the is, is the big thing as well, I want everything on my phone on all the inquiries in on my phone. I want to deal with him on my phone. Do I need anything else? So you're gonna talk to your cleaning. So you're going to schedule, the cleaners, or I've heard about dynamic pricing, or dynamic pricing. I need that too. Oh, I missed that. Oh, that's not in my PMS. And I come back to this list.
You could create a big list of planning for people to identify what they actually need in the future. Because as Terry said, You're not going to just stick them with four properties and expect just bookings to come in and everything's gonna be hunky dory, because it's not. This is a full business.
About Keystone Awards
Keystone built their own software for people to go in and how to choose the right property management software just like what you guys were talking about. Regardless, maybe you have three or four properties. maybe three or 4000. After that, they started seeing trends, you know, what was the best for somebody with up to 20 properties, somebody up to 50 properties, somebody up to 300 properties. They decided they would create this awards program, just recognizing the strengths of these PMS. So that's got 10. And then what they look for is a question that you're asking, what are what am I looking for in a good PMS?
The very first thing he looks at in a PMS is distribution. He can predict through our algorithm, he asks one question, and that question is, tell me how many channels you connect directly to. He can predict within 95% accuracy, if it's for the big five, which is booking.com, Expedia, homeaway, vrbo, TripAdvisor and Airbnb, if they connect to four of those, they will, in our algorithm, they will score right around 100.
If it's less than four, they will score rate around 75-65. The difference between 65 and 100 are two different planets, they're two different PMS is that you can't even compare. And then when you look at distribution, it brings in more distribution is so misunderstood. It's not how many OTAs you connect to it also brings into email marketing for vacation rental properties, Google AdWords, it brings into your Facebook, PPC, Instagram, PPC, and then that also brings into that no one ever talks about Now that brings into your interface that brings into your booking engine that brings in your CRM.
What is missing in our current payment providers
For Richard, some of the really important parts of the PMS is a financial management and distributed financial management through marketing partners, etc, etc, multi-currency, multi-language, all this sort of stuff as well. What would I like to see? It's what everybody wants, they actually need to have a mix marketing plan, and it fits into everything they just said. Richard would personally like to see more PMS pay more attention to their guest-facing websites. So everything is got to be dynamic, everything through Elastic Search that we use. So you get real dynamic data, your conversions go out, you follow all Google's rules about mobile-first web design for vacation rentals, stability, accessibility, you know, Richard thinks that's going to become more and more important.
Terry really doesn't like what he sees going on in the PMS world right now. He thinks this plug and play thing has gone too far. And it's gone too far, in this sense that everybody else is innovating, except for the PMS. What they're doing is their greatest claim to fame is you go on LinkedIn or Facebook and we're so happy to announce we have this new integration with so and so like, so everybody else is integrating and they're not.
For Trip Advisor, he feels like their clients are getting lots of bookings from them lately but do that core have email automation, right templates and triggers to automate that guest experience in your communications have have great owners' portal that all the homeowners can log into and see when their home is booked and how much money they're making, and then have a great API that makes it easy for other vendors to integrate with. So their clients can choose the best in class vendors for all these niche software.
And that really is where a lot of innovation is right, all these other software's that are going on, it's amazing to see how the ecosystem over the past five years has exploded. So so not only be able to have a great API to integrate with those, but also for the more tech-savvy property managers have an API where they can access their data and do other stuff they want to don't have it be a closed system, but allow their clients to innovate and build off the platform and integrate with a tight form to send a really cool messaging automation or innovate with their search words, or in
novate with other integrations, that they're building their own dashboards.
For Na'im, they use a number of different property management systems and channel managers linked up together in various combinations to start with.
The last one that they were with shall remain nameless, they somehow managed to get an API authorization to use API, which was in itself quite burdensome, as well as every information of your own data that you want to extract where they charge 100 pounds an hour for a developer to send you an Excel spreadsheet of something you should have fairly easily been able to export yourself. But they just had a mistake every day.
So they start off by cleaning our own Bible, their own cleaning add on the system. Na'im looked at the systems that they integrated with. And at the time, they just didn't have anything that made sense, they had some hotel software that didn't work for more than one location, or it didn't work for more than one city, or it didn't have the right strike structure. They started building, their API just kept crashing, where they just kept making changes, which meant they didn't get the information or the structure of the data kept changing.
So there was already an issue there. And that's when they did their own booking system, because that's all they had, really, that actually worked and build around that. He felt that the hospitality world is way behind in terms of software, like, okay, we're talking about not reinventing the wheel, but I can't see why not every PMS out there, you know, doesn't have a basic cleaning system, basic maintenance system, basic, forgotten the sick, linen management system.
I mean, every industry deals with linen, you know, how do you know how much linen you need every day? But there's just so many things that systems don't do. You can get a BI dashboard, you know, hooked up to your PMS. But the reality is, it's never going to answer the exact questions that you have as a business owner, have, you know, you can play around with it and try and get some interesting patterns to emerge.
But there's core functionality that you really need in one system. And then yes, of course, to expand to extend on that. It's great to have additional systems. But if that core is missing, you can have 10 system just to make up the core, you know, you need a system that will be your core.
Quickfire questions
How does your morning routine looks like?
David: I'm not an inspirational role model for that I wake up I have my cup of coffee, I check in with my kids to make sure they're there on their social distance remote distance class, and then I check my emails and get to work. So I'm a bit of a late Owl and I am not exercising or doing that much in the morning.
Na'im: If you really want to know I'm a morning person. It's just that circumstances in life don't really permit me to use that all the time. So I usually say mornings relatively late as well. As those of you who might have heard me before might know I'm a by that religion was purposes world unity and we believe to achieve that unity we have to work on ourselves as well as the society that we live in. So as part of that, we regularly read in the mornings in the evenings, just a couple of passages from the writing hyphae. So that's what I do when I wake up, say a couple of prayers. I don't have breakfast, I don't eat once a day, I'm dinnertime. So then I do some exercises, have a shower, and then get to work after that.
Terry: My morning routine is exactly the same as my afternoon routine. And my evening routine is I get up in the morning. Get ready, get dressed, get in front of my computer and stay there all day.
Richard: Well, I'm a bit of a sad person as well. So I get I'll wake up at seven o'clock. I Yeah, get on the phone. I check those emails on those people who want an immediate response from you have a cup of coffee, switch the computer on try and get a bit of space before the dogs are walked which is like nine o'clock in the morning for about 40 minutes. Back to the computer get welded to this chair. I've been seeing him for the last year. And here I stay. I go past lunchtime.
I might eat something at lunchtime. Not eating so much this year because of what happened at Christmas. Now the dog walk in the afternoon 14 minutes behind me you probably see some exercise machines rowing machine and a bicycle.
So I guess I guess I'm rugby on in front of the machines in the evening down the road machine do the cycling. Get back on the computer. My wife appears some somewhere in the middle of this every now and then. She's a workaholic because she's got a photo studio and is constantly doing interior design for holiday rentals. How sad is this life? We just live holiday rentals.
What are your guilty pleasures?
David: I guess two things so one, the fun thing on the side Lindy Hop, which is like swing dancing, to jazz music. So that's my big side. Passion. I used to go out almost every every night dance swing dancing Lindy Hop dancing there's a international Lindy Hop community and my wife and I we traveled for a year we stayed with Lindy hoppers all over the world. It was awesome and I miss it dearly.
Luckily my wife is a Lindy hopper so we are able to dance but all the big dances obviously have been closed for a while. So I can't wait to start swinging swing dancing away with with people again. And then also on the side note, I'm actually just making it into the year 2000 or so where we got a Nintendo Wii for my kids to get some exercise because they were not getting out of the house as much. And I've got an addicted to that as well. So my nine-year-old and I are battling each other on skateboarding around the park, that we fit board. And that's been getting addicting. And it's been a fun way to exercise in the house during this pandemic.
Na'im: I was hoping that David going first would inspire me with something because I know he asked the question ahead of time, but I couldn't really think of anything down to it. As David was talking, I was trying to come up with something may be what you might label me as crazy for is, although I'm a perfectionist, and if I do something myself, I usually spend hours and 20% of the time to get a 2% of the result. I guess when I delegate things, it's sort of I assume that the other person is the same.
And I know when I was a kid, I never really trusted anyone to do anything because I never did it right.
But since I've gotten into the business, I've decided that you can't always get things right and people are just going to do them wrong. So I've got to the stage where I sort of don't really care when things go wrong, I've sort of got detached from things going wrong because I just assume things will go wrong.
So I tend to start a lot of projects and do a lot of things and delegate a lot to the point where you know my dad asked me Two weeks later by the way what happened to that massive issue How did that property and like what he asked me How should I know someone else is dealing with a real problem.
Terry: Seeing that I sit in front of my computer all day, you know, you just kind of you'd go crazy but when I'm here and I'm just answering you know one email after another after another is I go on that YouTube video and I just get fascinated with watching these documentaries and videos on the mafia how they just scam people how they just if they disagree they beat the crap out of you that I put a bullet in your head that they just infiltrate and most corrupt people in the world and just reading but just fascinates me because they're to start I hate fiction. I hate everything fiction, you know, true stories. I love.
Richard: I live close to the coast. So as one of three things so I do a bit of midnight beach running naked. I've got a thing about motorcycles. I've got a huge motorcycle. And I know it's illegal but I do try and see how fast it will go too often. Which is extremely fast as it turns out, it's all legal. And the third thing is I trade some cryptocurrency and try and figure out how my son's managed to do so well on it.
What is your travel prediction?
Richard: I did a video on it last night with somebody.
Urban's gonna be a disaster still, really up until the end of the year, international regional business is going to be way down, particularly in Asia, again, because of flights and COVID. When breakout comes domestic travel will be like an avalanche, it'll go off the scale, everybody will want to travel domestically. That provides one big problem, or two or three big problems, there is insufficient inventory from owners, for agencies, and otas. Which means by the mind a lot of the bookings have been pushed forward to this year from last year based on vouchers and re-bookings.
It means the owners are going to be really heavily courted this year to either up the game on otas 11, the calendars and agencies will want them as well, because they don't have enough inventory to satisfy their bookings. And guess what?
You can get even better, the otas are actually going to have their calendars blocked out on mass by the large companies who can do the bookings direct. So otas are wounded animals right now. And you have to wonder what's going to happen? Well, Airbnb by Expedia has a thought, who knows? Possibly. And the final thing is, I think, technologies going to infiltrate this has been an inflexion point. COVID is an inflexion point for a lot of this stuff.
So technology, the specialist companies are going to accelerate remote entry, remote booking, distancing from people because the COVID and then you're going to get compliance, you're going to get a certification, you're going to get all these things, it's going to become much more professional. And I think it's going to be pushed from the otas. down and from the bottom up, because that's what guests want. The hotels are actually going to challenge it at that level. So yeah, that's it. I keep talking all night.
Terry: Domestic travellers can for sure, the airlines will remain on life support to the end of the year, I think the worst of the of the COVID is in front of us, March and April are going to be horrendous. The new strains are going to cause a tremendous problem.
And just in the infection rate, I'm not saying that the vaccines are going to be effective against it, I'm just going to say the transmission is just going to be out of this world. I'm going I see at the national level or United States never had a national strategy. They didn't listen to science.
They didn't listen to the scientists. I think what the different administration now they're going to listen to this scientist to the science, I think there's going to be a shutdown coming again. And I think 2021 is purely domestic trouble. And nobody's doing the United States they're having a real challenges on their vaccine rollout. No, I don't think any country is doing a worse job in the world at the vaccine rollout in Canada.
Na'im: What I'm really certain about is that my travel in 2021 will not involve a private helicopter or private jet. Maybe we'll have to wait and see. But it's something that actually I wanted to mention earlier, the big five didn't include Google. And I think that over the next year, we will see Google move to the forefront of travel with the launch of a number of interesting things that are coming up and I hope that in the future and hospitality providers will rally up and use the tools that are not quite out there yet.
But we will be putting out there fairly soon free for everyone.
David: I'll do a quick plug for our annual hospitality reports. Every year, we survey hundreds of property managers and ask them a whole bunch of questions and put out a pretty cool report.
So you can see what the benchmarks are and how you compare against other property managers and direct bookings, there was a big increase in that. And that's only going to continue I think, with the big cancellation wave with Airbnb earlier in the year, people have realized not to put all their eggs in one basket. In addition to that flexibility, is still going to remain flexible cancellation policies. I mean by that and both with airfare as well as, you know, booking vacation rentals, it's going to be now that everyone is doing that it's going to be hard to be the first one to take it away.
So I think that's going to, you know, persist for a while too, you know, to airlines chagrin, has specially and also as Richard commented, towards the end of the year, once this herd immunity starts to happen, and you know, knock on wood, it will happen sometime this year, urban vacation rentals, they've been decimated. But they're going to come back really strong people are wanting to, you know, not be in urban places right now. But they're missing it. And once it's safe to do that urban vacation rentals are going to be big.
And then finally, I'd be remiss if I didn't add the importance of a beautiful digital guidebook, it's now more important than ever, because a you need to clearly explain to the guests certain safety precautions and cleanliness issues within the home, but also local recommendations, you need to be able to tell them easily what's open, what's not maybe some alternative things from what's usually popular going to some indoor music venue instead, what are the cool hikes to do nearby?
And that's what makes or breaks an experience. So as people are staying local, in go into Vacation Rentals in nature, it's up to you to provide that five star guest experience and you need to have great recommendations for them.
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