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The masked manager   By The Masked Manager

All you pesky owners complaining about  service fees, best match, online bookings, drop in enquiries and lack of customer support, you won’t have to worry much longer, as you may well be out of business!

You’re shocked? Upset?  Do I hear cries of anguish?  It’s been coming, none of us actually wanted it but some of us have had to start playing the volume data and distribution game, making sure we do it better than the rest of you individual owners and other managers.

Guess what though; bookings are up 30% this year!  OK we work very long hours, need to reply in seconds, take money via multiple channels, synchronise everything, make sure we have the best photos, most information and abide by various discount rules, but who doesn’t?

The problem is (and despite my ironic comments to start this piece as we really sympathise and have our own but different headaches) owners are hard work for the OTA’s, they complain, but not as one voice, they are always calling support (staff are bottom line expensive), are often not technically competent and have so many different rules, wants and wishes, and concerns about the cash and correspondence. 

A manager may have 3000 properties, one account, one bill, one phone call and all nicely automated. Owners are expensive to support.  Pipe down there please.

There is a now a chasm between manual and automation appearing and no-one wants to be left on the wrong side. Traditional VR business is now being phased out by branded search and massive marketing spend which is derived from income on actual bookings and subscriptions still. Owners are being stranded as guests only see the more compliant inventory supplied via automation and volume suppliers.

Apart from the thousands of posts and comments recently on all the forums, this one post summarises where an owner’s problems lie:

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“I advertise on VRBO/HA because I pay them to bring me a name, phone number and email.  I did not ask them to handle my transactions, demand I respond to each inquiry, monitor and scrub my emails of contact info, penalize me for the time I take to respond, become my credit card processor, create canned responses for potential guests, and generate even more emails to the guest that I am unaware of (payment due when the guest has paid), put me in a position where I am compelled to use a mobile app to make a response that automatically attaches a quote when I had no intention of sending one and now extract an additional 9% fee from the guest.”

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Managers tend to have a lot of this sorted by investing in technology and living and breathing the business daily. Most owners have other jobs and let’s face it are unlikely to be very young to be able to have one or more second homes, so the demographics are against most owners to compete technically.

So is there any evidence that business is slipping away from owners?  There are plenty of people with no enquiries and no bookings now.  These quotes may sound familiar and are where thousands of owners are right now:-

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We too have experienced a massive drop in enquiries

I get terse requests for best price, if I get an enquiry
my conversion rate has plummeted

I am virtually invisible on HomeAway

If this continues I will need to sell

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Maybe this is because as an owner your “Book Now” buttons are not switched on, you don’t respond in seconds, you don’t have expensive panoramic photos, you haven’t logged in and updated calendars for a day, or you have refused bookings, or don’t accept online payments, or even because you are filling your calendar in other ways and not via the OTA, so you are ignored.

We all know this affects ranking, but this pure listing quality is now superseded by “best match”. All that hard work is necessary but has other hidden metrics connected to the guest experience apparently.

This is the link to the HomeAway explanation of “best match”.  Read it, it doesn’t say much, apart from “we are offering up what guests want”.  This is where your problems start!

https://help.homeaway.com/articles/How-does-the-best-match-algorithm-work

Assuming you have obeyed and knelt at the altar of HomeAway (or any of these sites come to that), what do you really think is going to be offered up and do you stand a chance overall or capturing that elusive customer?

Their clients are the guest, (not you) so accept this. Their guests apparently want quick transactions, immediate gratification and best price for dates and stay duration the guest determines, not the ones you like or are used to.

We all know that price is a big factor, but this business is held back by micro-margins, so what comes next in the algorithm?  This will be speed and ease of transaction, response and reviews and we suspect “account size”.  Wouldn’t it be better to get 1000 bookings from one company, with no need for individual phone support and automated income management?  It’s the 80-20 rule.

Whoa, I hear you say, that’s not fair. Sure your property may be cheaper and better quality: but in this case if the booking price is cheaper then it’s not good business either, especially if you take hours to reply and then you refuse the booking.  It seems to fly in the face of common sense based on price filtering but has some merits to increase an OTA’s income.

A percentage of a large number is better than a percentage of a small number!  As so many properties are being marked up to cover commissions and price parity is just nonsense, the best margin business is high value properties that accept higher numbers of requested bookings.  A $1000 per week property may generate $200 (service fees and commission), a $500 one 50% less.

CHOICE

It’s all about choice for the guest and for an owner this means being seen in an overwhelming volume of listed properties. 

Let me tell you a true short story about a Booking.com discussion we had.  With some success in one particular area, they called us and suggested they would like to help improve other areas, but to give us more online exposure in that area (first in fact), they would need more incentive. In fact the percentages would need to increase by over 50% per booking.  For them “Best match=Best Profit”.  

TOO MUCH INVENTORY

As just shown, there is simply too much. Who wants to be on page 300? The OTA’s are aware of this and shuffle inventory around to make the most money. This is going to be a transactional business model and commissions are made on each booking. There is no going back.

Owners have one property, managers may have thousands and despite what these sites think, guests do come direct as they are more likely to find a manager than an owner and managers can offer alternatives and use volume client referrals and smart tactics.

OWNERS WILL SLIP FURTHER DOWN THE PECKING ORDER IN THIS MODEL AS MANAGERS AND RESELLERS INCREASE THEIR OPPORTUNITIES AND PUSH MORE AND OFTEN DUPLICATED PROPERTIES INTO THE SYSTEM.

Getting seen is hard enough, but when Expedia use their subscription income to pay for Google ads that only direct to Book Now properties, presumably you feel ripped off.

Read this article for more information.

http://bit.ly/1VHFilF

THE TRANSACTIONAL TIDAL WAVE

In late 2014, HomeAway.com had close to 860,000 properties and nearly 30% of these were “Book Now”:  60% of these were owners and 40% managers according to my sources.

This week there are 1,265m and 66% of these are on “Book Now” globally.

Managers are approx. 50% of inventory and close to 80% of these are on “Book Now”, whereas only 53% of owners use “Book Now” despite the big push.  That’s hundreds of thousands more properties more compliant from managers and on “best match” and getting booked.

Manager levels have increased as a % of the total volume in this period as managers use channel technology to pump inventory into their platform automatically and keep it updated.

DO MANAGERS CARE?

They sure as hell care about their owners and spend a lot of time working the systems. Do they care about HomeAway, Booking.com, TripAdvisor, Flipkey or the rest of them?

ABSOLUTELY NOT THEY ARE JUST ANOTHER MEANS TO AN END.

It’s not a nice wholesome industry anymore, its survival of the fittest and managers are all simply working through multiple opportunities via technology and volume agreements. Owners: well its cold outside.

If you are an owner and feel as though your world is being ripped apart, it’s because it is and we can only feel sorry for you all, but the train is leaving the station and most owners are not on it and the OTA’s are not too unhappy we think!

The Masked Manager

The gloves are coming off each month so drop by to hear what the masked manager has to say.

The Masked Manager | GOOD BYE OWNERS, HELLO MANAGERS!

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