Vacation rental trendspotter Matt Landau talks to Lodgify about the biggest threat to the industry, delightful guest surprises and how to avoid burn-out.
Matt Landau, the owner of VRMB and vacation rental expert, has been in the business for more than 10 years as both a host and an industry blogger. He has earned his place as one of the biggest names within the vacation rental industry today, so you could say that he knows quite a bit about short term rentals.
How did you get started in short-term rentals?
Matt: I got started the same way most people get started – completely accidentally. Without any plan! I was working in Costa Rica just out of graduation and was told to check out a little, historic district in Panama – Casco Viejo – where I stayed in the only nice place to stay – a vacation rental company. I fell in love with the neighborhood.
A year later I purchased that company with a partner. We had zero experience. Suddenly I was thrust into the role of host. My partner and I just winged it.
Because there was no competition, it was an easy place to learn those lessons the hard way. That process of trial and error required a lot of A/B testing – and being deliberate about what was working and what wasn’t working – to generate bookings and build a brand.
I started sharing my best practices with other hosts around the world, and at that time there was little other information available – that was my kickstart into the world of education. I sold the company 10 years later and now focus on the education aspect full-time, which we call VRMB.
What makes you different from other experts – what is your unique selling point?
Matt: There are so many experts, and I have mixed feelings about them. I get very suspicious when anyone promises you can get-rich-quickly overnight. As we know, this is far from the truth.
I don’t consider myself an expert – more of a connector, or a spotter of patterns. I surround myself with lots of vacation rental professionals. When you see a lot, you see the trends.
My role is to synthesize those patterns and share them – to help them take advantage of the best practices.
My advice to newcomers is: Be wary of who you follow – what they promise, what they teach. Ensure it’s hospitality-focused expertise, not lease arbitrage or other models. Watch out for anything that takes you too far away from the core of this business – which is taking care of visitors and ensuring they have amazing holidays.
Photo by: Stuart Hooper
Tell us about your experience with burnout – and how to prevent that as a host.
Matt: Well, I burned out myself. After some years, someone challenged me and said you are clearly not as passionate about the industry as you once were. It is time to move on.
Looking at burn-out as negative is not fair – people burn out from relationships, where they live, and businesses. However there is one thing you can do to reduce the risk – one huge truth – you should view your vacation rental property as a business.
Many start accidentally overnight and it’s easy to wing it initially – so, they don’t plan their properties like a business. The moment you do start seeing it as a business, it suddenly changes your entire lens.
It is never too late to make a plan and having that plan based on the input of others who have executed that plan makes all the difference.
What is the typical profile of a vacation rental host today?
Matt: It is very different from when I started. In good and bad ways – for the broader industry.
The good is that hosts now embrace technology better than any generation before. It is an amazing upgrade in the acumen of short-term rental hosts.
Also, they are incredibly motivated and energized in ways that hosts from the past were not. A lot of the new hosts are younger, coming out of university, or they haven’t gone to university; they are renegades – doing things their way.
“This industry rewards renegades”
I also see some flipsides of hosts which could be dangerous – the get-rich-quick mentality doesn’t end well for anyone – guests, neighbors, or the entrepreneur. It is not a get-rich-quick industry.
When you look at it solely as a way to make money, inherently hospitality takes a back seat. Viewing it as a business means that you want to make profits; however, if you are only doing it solely to make money – all the other hospitality things will drive you crazy.
Anybody who wants to enter the industry should surround themselves with people who are actively running the type of businesses they would love to own a few years down the road – this is the best way to calibrate expectations.
Aside, from the get-rich-quick mentality, what are the other future industry threats to the future
Matt:
- Margin creep
This is a small margins business, and when you add additional layers to the business and don’t have the power to increase the price to the customer, the cost of running a business starts creeping up on the cost you charge the customer.
- Market correction
There will be huge market corrections over the next year or two against the last two years – which have been anomalies.
During Covid there was limited supply – most of our colleagues are starting to experience a correction and demand has dropped, but supply is about the same or a little up. So, suddenly we don’t have the ratio of two years back.
If you haven’t planned it out as a business – this has the potential to pull the rug out from underneath you.
Become focused on your positioning, what you offer and how it compares with other offerings on the market.
- The biggest threat by far is unfair legislation
There are conversations about this in every market, and if you don’t have a seat at the table, you will be lunch – they will eat your business. You have to be actively involved in local alliances, and actively keep track of laws and regulations in your destination, or you’re in for a rude awakening.
Listen to our How to save your vacation rental business podcast – with Dana Lubner – which focuses on best practices for being a responsible VR advocate.
Photo by: Stuart Hooper
What are the opportunities?
Matt: The category awareness of vacation rentals is growing, and it still has room to grow. Travelers for the first time ever are choosing vacation rentals as opposed to hotels – this is a big responsibility, but also a big opportunity to capture new demand.
“There’s never been a better time to run a professional vacation rental business”
There has never been a better time to run a professional vacation rental business than right now but you need to plan your business for the future.
This way, you immediately separate yourself from those who haven’t done any of that. For this group who are serious about the structure, organization and technology they are using – you can reach new levels. Now is the time to be a limited edition vacation rental.
So, how do you become a ‘limited edition’ vacation rental?
Matt: The limited edition framework comprises four things you can do as a host or manager to STAND out that no one else can do. They are the things that can’t scale. So, you don’t have to worry about competing with Marriot, Sykes Cottages, or Vacasa.
We call them FLOSS – you must repeat these elements in your marketing, like flossing your teeth.
- Family-owned and operated
- Locally based, i.e. not headquartered elsewhere
- Specialized in any given property type or region
- Delightful surprises woven into the stay that just can’t be mass-produced
The trick is to double down on your limited edition position, your value proposition that doesn’t scale. This allows you to stand out, and command top dollar. And because you have control over the supply, demand will always be greater than supply.
Which delightful surprises have you appreciated in vacation rentals?
Matt:
- A handwritten note – it’s unique.
- Another example – is a collaboration with a local business e.g. a supply of branded coffee for the first day from a local coffee shop. You become the limited edition ambassador of the business you work with.
- Another cheap one – is a picture frame by the side of the bed with a meaningful photo of your guest, especially for repeat guests. It made me feel like I was in good hands. Limited hospitality touches or gestures require a bit of thought, and you need a system – think about it as if your guest were your friend and what they would appreciate during their stay.
- A parting gift – it gives them something lovely and meaningful – the capstone of their stay. Think of it as a marketing investment for the future.
What about marketing advice for vacation rentals?
Matt: I am starting to think about marketing in a new way. I used to think about marketing as activities to promote generating more bookings – a logo, a website, an email marketing campaign, using listing sites etc. They still are, but we have shifted into a new phase – in the vacation rental sector.
“We need to look at hospitality gestures as the new marketing”
Why? If the objective of marketing is to generate more bookings – each new contact has a cost to acquire. Knowing this amount is helpful. Suddenly you realize that if you can get a guest to stay again or refer a friend to stay – the hospitality gesture appears cheap compared to what I would pay for an OTA or marketing campaign.
Start looking at gestures that happen after guests book and what happens in the home as the new marketing. This way we are able to capture the direct booking world that everyone is after. Anything that can generate a repeat booking is worth doing.
How important is it to list on OTAs when you first start out?
Matt: It is always important to list on OTAs – it is the cheapest way to generate leads. It is incredible what these companies have done – they have built an avenue to give everyone a chance to turn his or her property into a world-distributed hospitality offering.
However, be conscious of what you are signing up for. This is part of your business planning. Build the OTA listings into your marketing strategy.
So, guests can maybe discover you first through OTA, but then you start communicating your limited edition style of hospitality and form relationships with the guest.
If you’ve done a good enough job and captured their email addresses – you have used the OTA to generate a repeat or referral booking and advocate for your property. And if you do this enough times – much more quickly than you expect, you generate a hopper of people who love you and will refer your business.
OTAs are the most powerful starting engine of the business, but understand where they fit and start simultaneously to build your own brand and nurturing channel. This way you control the system, as opposed to racing your horse on someone else’s race course
Tell us who is Matt the person when he’s not breathing, eating and sleeping vacation rentals?
Matt: I always think about vacation rentals… I swim every morning, and even then I still think about vacation rentals, and when I travel I ask people about vacation rentals.
I moved to Miami during Covid, and I love it. I travel quite a bit – my pleasure and business lives tend to converge quite a bit. I meet a lot of community members and observe what they’re doing, and many are proud ambassadors of their destinations, and this leads to experiences and lessons for life – that’s my thing.
If you didn’t end up in this industry what would you have liked to be?
Matt: Probably an academic, teacher or researcher. My mother is a scientist and most of what I do is research. I get excited about digging deep into stuff and presenting it to people in ways in which they can understand it.
What are your current projects and where do people find you?
Matt: We refer to our weekly newsletter as the most thoughtful vacation rental newsletter because we don’t teach you how to get rich off Airbnb! The newsletter is free, and it is usually what people find first. For those who want to take their business to the next level, there is the option to join our longest-running community of professionals in this space, VRMB.
I also share stories of the most innovative owners and hosts on my podcast – UNLOCKED, which is also free.
Some of these hosts are doing things that are changing the world on a very different level from everyone else – and those are the ones I feature in a new docu-series – a television show called Homerunners.
The first episode will be shown on the grand stage during the opening of the 2022 VRMA International Conference from October 23-26 at Caesars Palace in Las Vegas.
Contact Matt if you would like to find out more!
