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Vacation Rental

This is a guest post by Dennis Klett, Co-Founder of Lodgify.com

There has been a lot of talk around the vacation rental industry in the last couple of years. Rightly so, after it has managed to evolve into one of the fastest growing industries in the travel sector. The future of the industry looks bright – and investors seem to agree, considering the financing round that Airbnb has just closed, valuing it at more than some established hotel chains such as Hyatt. It comes to no surprise that Starwood and IHG Execs are getting worried about losing market share to these giant home-sharing companies, and a Booking.com has decided to enter the industry by launching Villas.com – a dedicated site for vacation rentals, villas and apartments. Airbnb’s success and the growth of the vacation rental industry suggests that travellers are increasingly preferring to stay at vacation rentals rather than hotels. Hoteliers need to therefore gain a deeper understanding on the success factors of the industry and learn how to differentiate from and position themselves towards vacation rentals. Here are some quick insights into some evident vacation rental success factors:

AUTHENTICITY & LIVE LIKE A LOCAL

Vacation rentals aim to provide guests with nothing less than a home away from home. Most property owners invest a lot of their own time and effort in refurbishing, arranging and decorating the place, which makes their home feel more comfortable and authentic to guests. Travellers appreciate those comforts and the personalized experience that hotels sometimes lack. When choosing a vacation rental they attach great importance to the individuality of each home and base their final selection on the unique impression they receive from pictures and descriptions. Hilton will now become the first major hotel brand to allow guests to actually choose their room from a digital floor plan, giving guests more personalization options. Further, guests develop much more of a personal relationship to hosts of vacation rentals. Hosts are able to share more relevant local information on places and events in the surrounding area, and can provide credible recommendations. For guests this means less of a touristy experience and the sensation of feeling like a local.

SPACE, PRIVACY & KEY AMENITIES

Vacation rentals can offer guests more space and privacy. Typically, hotel rooms are 400 square feet on average, while the average vacation rental is 1,850 square feet. That makes it ideal for groups or an entire family. With the same number of guests, you would probably have to reserve multiple hotel rooms. Further, many vacation rentals provide a private garden or even a private swimming pool. Guests also enjoy many other amenities. They have their own kitchen or washing machine, some vacation rentals are pet-friendly, and free wi-fi has become a standard feature. Finally, as most vacation rentals are self-catered, there are no constant interruptions by housekeeping. Guests maintain their own space, which allows to keep their space to themselves. Yet, guests are always in touch with the host, on an as-needed basis. Hoteliers may now argue that vacation rentals do not yet compete for their core market of high-end and business travellers, however it may just be a matter of time. Airbnb has already made a move into that market through its recent deal with Concur, a provider of business travel and expense management services.

So what the above points ultimately lead to is a high number of repeat guests. Vacation rental operators have become experts in understanding how to provide an excellent guest experience. And that makes many of their guests return.

The vacation rental industry is moving swiftly. Vacation rental operators have adopted best-practices from hotel businesses and have professionalized their services towards travellers. One of the indications for this is the increasing demand in utilizing advanced property management solutions and creating an own website presence. Through new software-as-a-service solutions, such as Lodgify, this has become affordable even for small and medium-sized vacation rental businesses. It’s now come to a point where hotels, especially boutique and budget hotels, can learn certain aspects from the vacation rental industry. Considering the ever-changing expectations of travellers and guests, it may even prove to be vital for their future success.

This guest post was written by Dennis Klett, co-founder of Lodgify.com. Lodgify is a software-as-a-service solution that allows vacation rental owners and managers to easily create their own accommodation website and accept online bookings.

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This blog has focused on the new generation hotel, the new generation hotel guest and even the new generation general manager. But now meet a true new generation hotel employee. Florie has all the skills that it takes to apply for a managerial position in most hotels, but her approach to the process is brand new. Will the next generation hotel manager be a nomad like Florie? Read about her forthcoming plans in her own words.

Nice to meet you! My name is Florie. I’m a 27-year-old-French girl who loves travelling and studied Hospitality Management. Like you maybe?! 🙂

I was thinking about how to combine my passion of meeting people and discovering countries while continuing to grow my hotel management skills. I want to travel through Central and South America, but these are quite big continents, and I don’t want to rush through them. I would like to travel with a mission, not just to relax and take nice pictures during six months. And I would really like to be helpful to people and to continue to gain work experience in my field to become one day a great Hotel Manager.

I already gained some work experience as a Sales & Revenue Manager, and I had this funny idea… why not offer to share my business knowledge in exchange for a bed along the way from Mexico to Argentina?

An idea that I’m sure others already had before, but unfortunately I could not find anyone on the Internet with such an experience (if you do know of anyone, please let me know, I would love to get their feedback!).

It was a long time that I was thinking about the possibility to organize a trip this way, but I was also afraid that I was not enough an expert yet to dare offering my skills to hoteliers. However, two months ago, while I was traveling through Spain with my friend Julie that trigger happened… We stayed at the Casa Morada, a lovely and brand new hostel in Cadiz old town. As I was thinking about extending my stay, I asked the receptionist (who happened to be one of the hostel owners) about the rate. We started to speak about its whole hostel pricing strategy. I started to share with him some tips and ideas to increase the occupancy and optimize the daily rate. As we were entering into some interesting debates, he offered me to stay for free in exchange of taking the time to sit down with him a bit later on in order to continue the conversation and teach him the basics of Revenue Management. Deal!

Strengthened by this first positive experience, I tried my luck and repeated it in Granada. This time I sent e-mails prior to my arrival to organize the “sharing my knowledge for a bed” trading agreement. And it worked again very well. I met Pepe, the owner of the Polaroid Siesta Hostel where I enjoyed a marvelous stay.

Now back in France and sharing my impressions with my close friends, I decided to transform this idea into a real project and booked my flight for Mexico! I started a blog: www.thehospitalitytour.com and got connected with hotel & tourism professionals in Latin America using LinkedIn to extend my network.

And here I am now, preparing the trip! I’ll arrive in Cancun the 1st of July, and already received some invitations from Hotels and hostels in Honduras, Colombia and Peru.

Are you curious to follow my trip?

Do you know hoteliers in Latin America?

Would you like to help me with translations into English and Spanish of the blog?

You can follow the project on Facebook to get regular updates www.facebook.com/thehospitalitytour, or contact me at floriethielin@gmail.com for any questions or recommendations. I would be very glad to answer the best I can.

Hoteliers are known to be visually-oriented people. For as long as we can remember, they have selected hotel management software based largely on the look and feel of the product itself. This make sense. After all, the hotel staff never have quite enough time for a thorough training. Plus they have to jump from task to task based on the whims of the guests. So any software they use must be intuitive, fast and easy. In short, hotel software needs to have an excellent user interface.

With a new generation of mobile hardware now commonplace in hotels, hotel technology vendors are challenged to keep pace with today’s expectations of a top user interface.

So which hotel software products have the best user interface? Hotel management research firm Software Advice recently surveyed today’s offerings and selected the seven best user interfaces. Interesting, though perhaps not surprising, is that most of the long-standing market incumbents did not make the cut. The list is dominated by newer companies that have emerged just as tablets and mobile devices have become prevalent in hotel lobbies.

Heading the list is hetras, a German-Austrian company which has made a name for itself serving some of today’s most innovative chains. Taylor Short, analyst at Software Advice, explains his decision for hetras. “We chose the hetras Property Management System as one of our favorite UIs mainly because it looks as if anyone could pick it up and figure out its functions without much training. This intuitiveness makes it a top pick for design.”

The standard-bearer in hotel software user interfaces of the 1990’s was undoubtedly Fidelio Software (later Micros). Fidelio founder Keith Gruen is also a founder of hetras. “At hetras we are redefining what it means to have a top user interface. What worked on PCs does not work on tablets or mobile devices. In general, we are looking for inspiration from top apps from other industries – even games – and applying it to hotel software.”

A good user interface is by no means driven by the visual impression alone. “Another reason we feel the hetras UI stands out is because of its simplicity and efficient features, such as the fast post transactions and auto-fill for quick payments” added Short.

Other hotel software products making the top include Clerk, Loventis and WinHotel. For the complete list, see the full article.

 

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hetras User Interface

 

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This year´s IHIF in Berlin recently came to a close. The premier hotel investment forum focused especially on New Generation Hotels. hetras CEO Martin Reents took part and noted the top ten reasons to invest in New Generation Hotels.

10. The needs of travellers are changing. Guests will no longer pay a premium for  traditional brands, they are not impressed by imposing architecture and they turn down unnecessary service. They do, however, want to walk into a lobby that feels like home, require a perfect night’s sleep in a sparkling clean and quiet room and expect in-room technology to match what they have at home.

9.   New generation hotels lead the way in advanced digital technology. Today’s guests want to take control of their destiny. They want to manage their own profile, preferences and bookings, check themselves in and out, and take advantage of hotel services at their own convenience on their own electronic device.

8.   Highly successful pioneers have paved the way in Scandinavia, England and The Netherlands. New generations brands continue to open throughout Europe and the world.

7.   New generation hotels invest less per room, require less staff than comparable hotels and yet still achieve higher room revenue per available room than traditional hotels.

6.   New generation hotels are anything but “cheap hotels.” Quite the contrary: They consistently achieve top values in daily rates and in high occupancy, which exceeds 80% year-round.

5.   Lower personnel costs mean better service for guests, not worse. Through automation, the few employees in the hotel can actually focus entirely on the guests. This is reflected in the excellent reviews new generation hotels regularly receive in the review sites.

4.   Altogether, new generation hotels achieve a gross margin of up to 54%. The best hotels achieve around 20 to 50% higher profit margin than the average for traditional 3 to 4-star hotels in a comparable market.

3.   Real estate is available. Requiring only a fraction of space compared to traditional hotels, new generation brands can build a hotel on a very small space and even convert existing office buildings in prime locations into successful hotels.

2.   Savvy investors and funds are already bucking the traditional hotel models and moving to the new generation.

1.   Greater returns with lower investment: This simple formula sums up the success story of new generation hotels. The best new generation hotels can pay back the entire investment (including land) within 4.6 to 5.7 years – About twice as fast as traditional 3 to 4-star hotels in a comparable market.

The hotel of the future will offer three primary ways for guests to check in. Which one(s) will your hotel choose?

Kiosk check-in. We all know this from the airports already and hotels often follow the lead of the air travel industry – albeit a few years later. Is a kiosk a sign of poor service? We think otherwise. A fast and simple check-in is always better than a slow and complicated check-in, especially when one has to wait in line.

Mobile check-in prior to arrival. We estimate that virtually 100% of your guests will carry a mobile device in the future, and the vast majority of these devices will be app-enabled smartphones. These guests will be able to check themselves in with their device, possibly choosing their own room number and then using their device to open the door, thus by-passing the check-in altogether. Good service? Absolutely! Guests want to be in control of the process and there is no better way to give them the control by building it into an app.

Roaming Receptionist Check-In. This is a slight variation on the traditional front desk of today. Instead of the guests walking to the desk, you walk to the guests, carrying yourImage tablet computer. You can collect payment information, get the registration form signed (if these are still required in the future), generate a room key and send the guests on their way. This just might be the ultimate in service. Let your guests sit in comfy lounge chairs on in the bar while you check them in. Or take care of it in the hotel shuttle from the airport.

Will there be a fourth way? Comments welcome!

 

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