Posted By VRMA,
Monday, March 15, 2010
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As VRMA President, I want
to bring to your attention a grave situation facing our industry and threatening
our success as independent vacation property managers.
The situation is this: If we do
nothing and permit the current market forces to proceed, we will lose the
ability to independently market our homes/condos directly to our prospective
guests online. We will fall prey to Web portals that aggregate that demand.
These portals will then be in a position to force us to pay exorbitantly high
commissions--stripping us of our individual brands, significantly increasing our
distribution costs and, consequently, squeezing our margins.
companies are already competing to provide online distribution for our homes.
These sites employ well-designed Search Engine Optimization (SEO) strategies to
dictate the placement of their listings on search engines such as Google, Bing and Yahoo!
SEO is based largely on healthy
"content" of the products they market-- in our case, vacation rentals.
Ironically, these sites do not produce such content on their own. They must rely
on us, the property managers, to give them the listings they need to create that
content. Some of these companies come as wolves in sheep's clothing, offering
"free" listings or a low, reasonable, per-click or per-reservation fee to build
their content-rich sites.
So what's wrong with this "free"
or low-cost service? Slowly, these companies become a major portal for our
rentals and the major search engines seek them out before our own Web sites.
Several current VRMA members--including some very large ones-- report that their
own Web site now falls below these "free" or low-cost sites in the search
results for their company. And as that happens, "chest pumping" occurs by these
sites. They can now show you they are critical to your Internet marketing. And
guess what that means? The free/low cost service now becomes a major marketing
expense... and we have given them the building blocks to create the monster!
This is not
theory or an exaggerated extrapolation of facts; our industry is fortunate to
have the luxury of hindsight. The airline and hotel industries have already been
through this process and have been brought to their knees. An excellent review
of this history can be found in the article "The Prisoners Dilemma, The Stockholm
Syndrome, or a Case of Both?" The article describes how the
hotel industry's distribution costs roared to 4,000-6,000% above the cost of the
hotel's own Web site-- 4,000-6,000% higher!
We can also learn the airlines'
battle to recover from their hostage situation. The airlines came together and
formed their own Web portal, Orbitz. Together, they set the fees
for this site to pay for its development, design, implementation, and on-going
management, most likely at a lower cost than any of them could undertake on an
individual basis and more effective since the content included all the
participating airlines. The airline industry largely regained control of their
own destiny and Internet marketing expenses as a result.
Your Board of Directors brought
this situation to the attention of the VRMA members at our 2009 Annual
Conference Town Hall Meeting. Support was nearly unanimous for VRMA, as our
industry's professional association, to take on this challenge and follow in the
footsteps of Orbitz before falling as prey to the "chest pumping" gorillas that
we are currently and actively creating.
Toward this challenge, Vice
President Steve Trover and I recently attended a meeting with all interested
software suppliers to discuss an approach, solicit opinions and expertise and
formulate the details needed to develop and create an Orbitz-like system for
VRMA. Before we find ourselves paying 4,000-6,000% more for distribution, this
initiative can develop a system that protects our brands, effectively markets
our homes/condos and appropriately controls cost, with transparency to all VRMA
with any threat, opportunities also exist. We observed a cooperative environment
among the software vendors in attendance and a consensus that our industry must
come together to seize the opportunity presented, albeit within a narrow window
At the upcoming VRMA Regional Seminars, you will have the opportunity
to hear from Tom Botts, our keynote speaker and
the consultant who led this meeting of software vendors and was subsequently
hired to work toward a solution. Tom has experienced this exact process during
his 25-year career in the travel industry, as he worked for major airlines and
We are at a critical juncture
for our industry. We believe VRMA can be a leader in addressing this threat and
formulating a solution for our members. I encourage you to attend your Regional
VRMA Seminar in Myrtle Beach or Reno to get all the facts on this
feedback is important as an active and vital member of our Association. Send
comments to firstname.lastname@example.org with "Clear and Present Danger"
in the subject line. I look forward to seeing you in South Carolina or
behalf of the VRMA Board of Directors,
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Posted By VRMA Management Team,
Thursday, October 08, 2009
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Dear VRMA Members,
As we approach the 2009 Annual Meeting to be held during the upcoming conference in Washington, DC, as President of the Association I want to provide a report to the membership of what has transpired during the previous year.
As we all know, it was a tumultuous beginning to the year as a major faction within the membership under the label “SAVE VRMA” rallied forces and made their collective voices heard. Through an overwhelming majority of that part of the membership, many new members were elected to the Board of Directors. Within the following weeks, three of the returning Directors resigned their positions for various reasons leaving a Board of nine Directors in place. Since the major focus of the “SAVE VRMA” effort was based on transparency in a “Member-led” organization, the remaining Directors did not feel it was appropriate to appoint new Directors to fill in these positions, even though the bylaws permitted them to do so. The Directors wanted the membership to have a voice in the selection of those new Directors. This left a burden of significant changes falling on the remaining Board Members. I can personally vouch for each of the other eight Board Members, having stepped to the plate and contributed a significant number of hours towards the work and business of the Association over the ensuing eleven months.
In this report, I want to review the initial goals undertaken by your Board of Directors and comment on some of the specific initiatives implemented to work towards achievement of those goals. First, allow me to review the focus of the Board in leading your Association over the past year:
- Increased financial oversight
- Control of the organization by the membership through their elected Board of Directors
- Plan and implement initiatives to undertake the biggest challenge our industry…AWARENESS OF VACATION RENTALS
- Increase services to, and value of, membership
- Continue to focus and improve on educational opportunities provided by the association
While there is still much to do in the furtherance of meeting these goals, the following summarizes the work undertaken thus far in achieving them. By category as defined above these summarized initiatives/methods are as follows:
Your treasurer, Ben Edwards, and I provided customized Financial Reports to the Board of Directors each month. Previously, minimal quarterly reports were provided. We reviewed these financials and added notes of significant items for the benefit of the entire Board. Availability of discussion was then encouraged at each Board Meeting on the full set of financials.
INCREASED FINANCIAL OVERSIGHT
A budget was prepared and approved by the Board prior to the release of general funds for any 2009 expenditures. Prior to this point, the budgets were rarely submitted or approved by the Board prior to the Spring Seminars thus having a significant portion of the year having passed by with no budget in place. From this point forward, approved budgets will be required prior to the start of each fiscal year with involvement of the entire Board of Directors.
An independent accounting firm was engaged to prepare and perform a review of the financial statements, financial procedures, management contract, and other related items. A report on their findings and suggestions was reviewed by the Board. Hutchins Allen & Co. now prepares the financial reports each month along with notes and questions for the Board to consider. These are then reviewed by the Finance Committee with additional comments for the Board to review.
For the first time, the Board is able to “manage by the budget” having already performed the forecast, and adjusting as necessary as the reality of the year progresses. This was helpful during the past year as the Association also had to deal with the effects of the economy.
CONTROL BY THE MEMBERSHIP
A Management Relations Committee was originally formed, but later dissolved. The purpose of this was to ensure effective communication between the paid management staff and the Board. However, the Board determined this was more of hindrance to communication, so it was dissolved. It was decided that Management and the Board should have free flow of information between each Board Member and Management and vice versa. This has become a reality as the year progressed with numerous email communications directly between any Board Member and the Management Staff. Toward this end, an Internet based communication system was set up for Board communication among themselves and with Management. This permitted free and open access to all communication between Board Members and Management. This also helped with the transparency issue so that there were no sub-groups within the Board and all members were equally informed of issues coming before the Association.
In the past a significant portion of the membership, the supplier/associate members, were denied representation at the Board level. Since they represent approximately 20% of the total membership, the Board felt it was pertinent to permit at least one Board of Director position coming from this part of our membership. Kyle Buehner, as Secretary of the Board, represents the first supplier/associate Board member in this capacity. The upcoming Annual Meeting nominates a second person from the supplier/associate category so that two of the twelve Board Members will be from this group. The new bylaws also require that at least one Board Member position always be from the ranks of the supplier/associate members, but no more than 2.
Surveys over the past several years have clearly indicated that “awareness” of vacation homes as a lodging option is the biggest challenge facing our industry. The current Board has undertaken this mission with gusto. Our Association has accepted the offer from the independent group “Discover Vacation Homes” to provide all of the assets and history of DVH at no cost, with only the promise to continue its promotion on a national basis. This includes not only a consumer oriented website, but also a significant strategic initiative from a public relations standpoint. The hiring of the nationally recognized travel public relations firm, Ypartnership, has made great inroads over the first year of the DVH initiative. I would point out that public relations strategy such as this can be analogous to preparing, sowing and planting a field. It takes time for the seeds to sprout before the harvest arrives. Such is the case in this first year, but very visible signs of the rooting and sprouting are apparent throughout the travel industry. It is important to note that Discover Vacation Homes is not merely a website with listings of our member companies. While this is one of the strategic initiatives to achieve the awareness goal, it is a minor part. The public relations part is the largest segment of this initiative and drives towards our goal of increasing the vacation home industry’s income share of the $300 billion travel industry. Evidence of the success of this campaign will be highlighted during the upcoming conference in Washington, DC.
INCREASE MEMBERSHIP SERVICES AND VALUE
The new website permits us to post documents and resources for our members. A good example is the “white papers” which have been posted by Steve Milo and his Government Issues Committee. This provides valuable resources for those members who face rental restrictions in their market areas. Other issues which arise can equally be posted, increasing the value of the VRMA website as a member resource.
Through the efforts of Rick Fisher, our Director of Membership and Strategic nitiatives, we have signed up four major sponsors for VRMA which include HD Supply, Instant Software, CSA Travel Insurance and Kaba Locks. In the HD Supply sponsorship, all VRMA members are instantly eligible for the National Association discount of up to 14.5% on the over 19,000 products they provide. In many cases, this discount alone will more than offset the cost of VRMA membership. In fact, in many cases, the savings incurred are multiple times the cost of VRMA membership. The Board of Directors is looking at researching additional partnerships which yield tremendous advantages for our members through national alliances and group purchase discounts.
EDUCATION FOCUS AND IMPROVEMENT
In the past we have attempted to create a curriculum for a certification in vacation property management. However, while we have sponsored individual courses, there has not been a definition of what is required to obtain the moving target. Over the past year, the Board has agreed on a designation of Certified Vacation Rental Manager through completion of the array of courses already offered including the final one to be offered at the upcoming Washington, DC conference….Marketing. Those who have successfully completed all the courses will be publically awarded the designation during 2010 VRMA events.
This year’s Washington, DC conference has an outstanding lineup of sessions. The Conference Planning Committee has done a stellar job in identifying relevant topics and finding speakers to present them. Additionally, this year for the first time we are sponsoring an Executive Level Tract (ELT). During each of the concurrent sessions, an ELT course will be presented and geared towards CEO’s of all of our member companies as well as top management. These are relevant courses for anyone in a high level position who must deal with all the issues we face as a Vacation Rental Management Company. These courses were designed with input from major VRM’s around the country and we have sought out expertise in the subject areas to present these courses.
Another important subject to cover is the dues structure for the 2010 membership year. As you know, the dues have increased to include $3.00 per rental unit managed. In some cases, this will be a large increase over dues paid in the past. However, as you can see from the work completed by your Board over the past year, the awareness issue requires funding to continue to fund the elements required. It would be our long range hope that through partnering with national services which promote savings for our companies and provide donations to the Association, that cost of membership in VRMA will be reduced in the coming years. However, to get these initiatives off the ground and to create the ground swell, we must fund these projects up front. While compared to previous costs of membership, this represents an increase in dues, we are hopeful that our members will share our vision and strategic plan on reaching the new levels to which our Association aspires. Instead of looking at this as purely a cost of membership, we ask that you look at it as an investment in the future and a part of your marketing budget. Future benefits will include driving additional business to your website, enjoying reduced costs of services and products you are already purchasing, and enlarging the vacation rental home segment of the $300 billion travel market. All of these will have a direct impact on our individual company’s success in years to come.
Anytime such significant initiatives are implemented, some will question the strategy, methods, and tactics in order to achieve the vision. However, we have not spoken to anyone who does not share the ultimate vision. Therefore, I extend a personal plea for you to judge your Board of Directors by the results achieved in fulfilling that vision. I also encourage your support through your volunteer efforts on committees, responding to the many public relation projects which are available to us throughout the year, and yes, helping to fund these projects in the early years. Your Board will always be looking for ways to increase funding of these projects from outside sources, such as additional sponsorships and national purchase agreements for our members.
So, it has been a very active year for your Board of Directors and we believe we have made substantial inroads into the many changes that the membership has asked us to conquer. Your Board has tirelessly and effectively donated a large piece of their working hours throughout the past year. Collectively, a conservative estimate would be that through our time and expense incurred in attending meetings and working on projects, your Board has invested well over $100,000 in service and leadership to the Association. We share a common vision and passion for how we view our industry and what we see as a bright future for our Association. I ask you to give thoughtful consideration as to where you envision your industry association should be and if you agree on the path your Board of Directors has set for taking us to new levels. If your conclusion is that you share the vision, which I hope you do, I would then ask that you also provide your support in words, deeds, and financial commitment to helping your Association achieve those levels. I look forward to seeing you all in Washington, DC and enjoying an outstanding conference from an educational, networking, and enjoyment standpoint. I look forward to seeing you on “The Hill”.
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Posted By Outer Beaches Realty,
Monday, March 16, 2009
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Dear VRMA Members,
Welcome to the new VRMA.com!
Your voices were heard loud and clear that we needed a new ‘face’ and more user-friendly and useful membership website. Well, here it is. The VRMA board is excited about this and hope it delivers to you what you expect from our professional association. Your comments are welcome, especially if it’s to thank and congratulate our Website Committee for exceptional performance. Many committee members have donated their time, talents, and expertise to bring this to fruition since our annual conference last fall. This will now be an active website where we can share common information and serve as a resource library for issues which face many of our members. Stay tuned as the site increases in information and usefulness.
Also, be sure to check out our new Discover Vacation Homes website and register your company to benefit from this campaign, which will bring national awareness to the vacationing public and tap into the other 90% of the leisure travel industry which the PhoCusWright study said we were missing the boat on.
Your Board is hard at work. Transforming the Vacation Rental Managers Association.
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