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Breezeway is very excited to end the year by flipping the script and interviewing one of our favorite interviewers, Matt Landau, Founder of VRMB and host of the Unlocked podcast. Matt covered a lot of ground through two seasons in 2021, from high level business strategy of magic zones to the nitty gritty unglamorous side of the industry. The two seasons combined, gave us a comprehensive look at the industry, where we’ve been, and where we’re headed. Read our discussion with Matt below to recap some of the key trends from 2021 and predictions for 2022.
Breezeway: In season 6 we learned all about the concept of “Magic Zones,” which we went into detail about in our season 6 recap blog, now season 7 was called “Unglamorous.” Can you tell us more about what inspired this theme and what your goal was for this season?
Matt Landau: I wanted to pick a theme that resonates with everybody that's almost like a touchstone that has never actually been identified or called out before. Since COVID and since last season the single biggest theme that we've noticed beneath every conversation, every conference, and every interview, is that it's really hard to manage a vacation rental business. It's harder now than probably ever before, and some of those things can be alleviated, but a lot of those things cannot. There are hard unglamorous jobs that go into this industry that can't be made pretty and they can't be hacked, they're just unglamorous.
I wanted to uncover just a bit of honesty instead of always being rosey. Let's take off those glasses for a moment and let's address the things that are not so sexy and let's address them in an entertaining but real way. I think in each episode we were able to pull out one new way of thinking about this unglamorous aspect of the job, which at least can make that unglamorous job a little bit more tolerable for our colleagues.
Breezeway: In speaking with people in unglamorous roles, in a way, you glamorized them.
Matt Landau: I would consider that a huge compliment. I thought that was a lovely way of turning around what were previously thought of as some of the least recognized roles of the business but actually the most critical and important. So, I think glamourizing that was a fun twist.
Breezeway: Agreed. When we hosted the monthly Breezeway Excellence Awards for customer service week and international housekeeping week we got overloaded with submissions during those specific months, which just demonstrates what you said about certain individuals being such an important part of the industry and deserving more recognition.
So, in reflecting on these two seasons, where do you see the crossover between Magic Zones and the Unglamorous side of the vacation rental industry? Do you need to establish your Magic Zone first and then optimize the Unglamorous work or vice versa?
Matt Landau: I wish I could say that I planned for one to evolve into the other beautifully and artistically, but I didn't. Thinking about it now, it's making me realize that the theme of unglamourous, recognizing that there is a not pretty side of this business that contributes to the outcome, is very similar to reminding ourselves frequently what our magic zone or sweet spot is. We have to remind ourselves of the reason that we first got started in this industry, what our ideal business is, and what our limits are that we're not willing to cross with regards to guest and owner expectations. It's an opportunity to draw a line and say exactly what we're looking to achieve and everything we do each day is going towards that.
Breezeway: In the first episode of Season 7 you interviewed Rocio Lane of Cleancio. She said, “I think the main advice we have is to prepare. We can’t avoid guests arriving early, making a mess, and checking out late because that's what they are there for. They're having fun and they're on their vacation. I think what you need to do is be prepared for those scenarios, have those conversations with your housekeeping team, maintenance team, and whoever might interact with guests. We try to advise and train staff on those situations and what we expect and don’t expect from them.” So right off the bat Rocio really challenged this assumption that the unglamorous work is behind the scenes. After hearing from Rocio and others in the industry, what else did you learn about how the unglamorous work affects the guest experience?
Matt Landau: Well, she is an absolutely remarkable young entrepreneur and she actually recently won the rising star award at the VRMA International Conference. I think this is a reminder, and Breezeway is a great example of this as well, that trying to solve this unglamorous side of our industry, whether it's from a tech perspective or a logistics perspective or a communications perspective, has huge first mover status and there's huge money to be made. I think a lot of people spend their time working really hard in the business, but if they take a step back and work strategically and think about how to resolve this pain point, there is huge money in that. I put the challenge of housekeeping standards right up there with unfair regulation as one of the things that if you're able to solve it or at least be a leader in your market trying to solve it, you can gain first mover status.
The other thing that I love that Rocio said from that interview was that the moment our guests leave their house to go to your rental is when vacation mode is on. So if we can do those little unglamorous things ahead of time, not after they arrive, but the moment they begin thinking about that trip, then we have achieved a pretty remarkable calling.
She even gave me a tip that I use in my normal life, which is to write love letters to the housekeepers of wherever you stay. This could be in the form of little thank you notes, so I do it now everywhere I go, I write a little note and sometimes I'll leave a little gift. I thought that it was amazing that Rocio calls them love letters, and she says when somebody receives that note validating what they did to make that home clean, it’s a game changer for them. So I recommend everyone do it, it doesn't take much time.
Breezeway: In addition to unglamorous work, we also heard a lot about consolidation in the vacation rental industry and this sort of messy transitional stage. Eric Broughton of InhabitIQ said, “The amount of consolidation that's taking place in the vacation rental industry right now is a natural phenomenon, it's normal, it's part of technology and disruption. So there's a real need to differentiate yourself if you want to survive and continue to be that smaller player.” Do you agree that this consolidation will continue in the industry? And how do you think managers can plan for this in 2022?
Matt Landau: As Eric points out, we have it all within us to focus on doing the things that only you can do better than a larger manager. I think that plays into our advantage as smaller operators. For example, we have the fact that most of us are family owned or operated businesses, the fact that most of us are locally based in any given destination meaning we're part of the community, the fact that most of us specialize in a particular kind of property or property location, and the fact that most of us deliver surprisingly great service for a vacation rental accommodation. Many managers already do this, but it's merely a question of repeating it over and over to our guests. I think the reminder here is to keep saying those things to our guests as many times as possible. I worked with a copywriter for a project and one of the biggest takeaways from him was that if you're trying to communicate something use that word or phrase over and over again. People don't read and retain things once, you have to repeat it so that people remember it.
Breezeway: Do you have any other tips or tricks for differentiation or examples you can think of in addition to the family business example?
Matt Landau: One is something that I call radical simplification. A lot of businesses over the years have accumulated new pieces of their business and new opportunities that they took on because it seemed like a good time or good cash flow. But over time it starts to resemble this leaning tower that is just kind of like moving forward but there's a certain beauty in destroying it creatively. Throwing your business model on the ground and seeing which pieces still remain intact, seeing which ones you still enjoy, seeing which ones are strong. Then you can piece back together what the business looks like moving forward. What emerges from this creative destruction oftentimes is a radically simplified version of what you had, and it makes for a much more pleasant lifestyle when you're only focused on doing those fewer things really well. It's much more efficient because you know those things work especially well, and most importantly it brings some motivation to what was turning into burnout for a lot of people.
The other way that I think is easiest for these vacation rental managers to stand out and is probably more important now than ever, is a tech stack that is assembled intelligently. I have a theory called the agile approach, which is basically if you've got a tech stack that’s strong, you know how the pieces work, you have a core property management software, you have plugged into that specialty tools that do exactly what you want better than any property management software could, then that tech stack is the differentiator.
Breezeway: I can see how differentiation might be easier said than done and could be really hard for managers to adopt because of course they want to do everything well and cater to every guest, but actually narrowing down their audience could make them more successful.
Matt Landau: My favorite episode from this year was Carl Shepherd, founder of HomeAway, and he basically said niches are the future of vacation rental managers. He said you're not going to build a billion-dollar company, but you are going to build a profitable lifestyle business that you can pass on to your children, and I think that's a huge reminder for a lot of us that the niches haven't been carved out yet. For example, I predict we’ll start to see a new niche of environmentally friendly vacation rentals and more eco-conscious managers to target that strong demographic.
Breezeway: You talked to Theo Kracke of Paradise Retreats about how he fought against vacation rental regulations in Santa Barbara, and on the flip side, you talked to Jessica Sheedy Black, a regional leader of the Texas Neighborhood Coalition who fought for vacation rental regulations. What was that contrast like and what did you learn from hearing both sides of the story?
Matt Landau: Theo is an extreme example of pro vacation rental achievement, whereas Jessica is in favor of fair regulation, which I think adds some balance here. What we heard from Jessica was that no vacation rental group has ever reached out to her for her opinion or to hear her side. I thought that was very poignant. I can understand why that’s the case, but I also don't think you can solve a community problem without integrating all the stakeholders in the community. I think we could both do a better job of reaching across the aisle more.
Respect goes such a long way in these situations and so long as you know each other's goals, there can be mutual respect. So Jessica and I discussed that before our interview and I told her my goal for having her on the podcast was to showcase her counter opinion, and she respected that. So if you give somebody who's got a level head the microphone and they trust you, I think it makes for some pretty entertaining and educational material.
Breezeway: Now that you have heard so many perspectives in 2021 from almost every segment of the industry, where do you think the vacation rental industry is headed in 2022? What will be the key to success?
Matt Landau: So I think we're experiencing a change from operations to strategy. To break that down, by operations I mean you used to be the winner in your market if you were operationally efficient. That used to be the game changer if you had all your operations down and we're using the right tools and processes, you won. That's no longer the game changer, now that's now the baseline. The good news is that there are a lot of tools like Breezeway that help you be more operationally efficient, the bad news is that all your competitors have access to that too.
So operational efficiency is now the baseline, which shifts us towards strategy and strategic differentiation. There are a couple pieces that go into a strong strategy:
- Relationships that can't be hacked.
- Long term vision - having a plan beyond just the next fiscal quarter so that you can stay consistent activities that are irrevocable that cannot just be cloned or purchased by a bigger richer competitor.
- A very clear definition of what you want - you have set boundaries for your magic zone and understand what your businesses’ sweet spot is.
I think those are all the tools that help us get stronger strategically. Operational efficiency is now the baseline to compete in this industry. Those who are really going to excel in 2022 are the ones creating strategically sound models and are positioned correctly to differentiate their business.
For more information regarding Breezeway's partnership with Unlocked, visit VRMB, and stay tuned for Matt's Season 7 recap episode!