VRMA Announces Vacation Rental Switch RFP

Industry StatsThe Vacation Rental Manager’s Association (VRMA) made an exciting announcement today: They are sponsoring the construction of a “vacation rental switch” — a centralized location for vacation rental managers to easily distribute their inventory to online distribution channels.

A Vacation Rental Switch (VRS) could be a huge boon for the professionally managed vacation rental industry.  It will provide one low-cost and structured mechanism to quickly and easily enable online bookings at 3rd party websites.

GOOD JOB VRMA – THIS COULD SOLVE A LOT OF PROBLEMS

Currently there is much pain in the industry around distributing inventory to 3rd parties… each VRMA member is at the mercy of their Property Management Software’s (PMS) distribution system and relationships.  It will

  • help the PMS companies by providing on switch to rule them all and in effect leveling the playing field.
  • help the VRMs by lowering their cost and increasing their efficiency.
  • help the suppliers by having only one data-feed to work with thereby creating larger scales of efficiency.
  • help the industry by putting the owners of the data (the VRMs) back in the driving seat.

THE INDUSTRY ITSELF IS HUGE AND RICH

PhoCusWright’s Vacation Rental Marketplace: Poised for Change:

  • Vacation rentals accounted for more than 333 million available unit nights in the U.S. market in 2007.
  • Vacation rentals accounted for nearly $24.3 billion in rental revenue in 2007.
  • Approximately 10% of all U.S. adults and nearly 20% of all online travelers have booked a vacation rental.
  • Vacation rental consumers are a market to covet: They’re well-off, well-educated, and they travel – a lot. Nine in 10 take at least four leisure trips a year.

VRMA itself averages more than 600 property management and associate members in the United States, Canada, Mexico and the Caribbean representing approximately 150,000 vacation rentals, condos and villas.

Hundreds of millions of investor dollars have flowed into this space in recent years, whether to rental-by-owner behemoth HomeAway (which  announced a staggering $250 million placement) or B2C and B2B online players such as Escapia, LeisureLink, VacationRoost and Zonder. Vacation rental management companies across the industry have identified online distribution and investment in technology among their top strategic business priorities. Wyndham’s concerted push with its Endless Vacation Rentals brand is but one of many.

DETAILS ON THE NEW SWITCH

Many of the current pain points can be understood by reading between the lines on VRMA’s Declaration of Distribution Independence.  The Italics added by me to help readers grasp critical pain points and read between the lines:

Goals

  • Create quick access and trusted experiences for consumers
  • Create centralized location for vacation rental managers (VRMs) to easily select distribution channels and control inventory distribution (i.e. blackout dates, distressed inventory)
  • Create a centralized location for distribution channels to access vacation rental inventory
  • Provide a platform on which the industry can develop relevant merchandising and e-commerce tools such as reviews, tours, special insurance, etc… that would benefit the industry first before any 3rd party distributor
  • Require that all distribution channel partners who access the inventory abide by a set of rules that protect professional mangers’ best interests and corporate integrity
  • Facilitate simple, cost-effective 3rd party distribution that ultimately leads to greater volume of bookings and greater revenue per booking for the VRM industry
  • A low cost to utilize the Switch for both VRMs and Distributors that will stimulate usage and ultimately facilitate significantly greater amounts of commerce
  • Create a revenue stream to be used for the promotion of the VRM industry and its interests
  • Create an revenue stream for any software provider who enables VRMs to simply and easily distribute through the switch by adopting its technology standard
  • Create a revenue stream for distribution channels who abide by the rules of the switch enabling managers to choose which distribution partner they would like to distribute through based on that channels terms & conditions
  • Provide a manual upload for property managers to distribute through the “Vacation Rental Switch” in the event their software provider does not participate
  • Provide influence and control to Industry Stakeholders
  • Have a Switch that is produced and managed by a credible, experienced management team with
    • knowledge of the needs of VRMs and Distributors
    • the technology expertise to deliver the solution, and
    • The financial stability and resources to fund the Solution and maintain it over a long term period

Concerns:

  • The Solution should protect vacation rental managers from unfair exploitation from 3rd party distributors while enabling distribution to propagate
  • The Solution must not attempt to set market rates, rather it should facilitate more competition and market rate options. The presence of the Switch will permit the free-market system to establish competitive rates, and eliminate monopolistic rate power.
  • The Solution should be constructed to benefit from the lessons learned from the hotel and airline industry distribution world, and explicitly provide mechanisms to avoid allowing any 3rd party distributor from gaining so much pricing power that it could “dictate terms” to the industry
  • The Solution should not create the opportunity for a “choke point” in the industry that would allow any one party to take advantage of the industry
  • The Solution should not be set up so that a sale of any particular vendor or participant in the Solution could seriously jeopardize the interests and well being of the VRM industry

This will be fun to watch play out.  I expect some sour grapes and sniping from the entities that stand to lose control and revenue.  I expect many supporters who are either sick of the current status or on the outside looking in.  For sure, VRMA has taken a huge  bite and will be challenged by the difficulties of mounting a giant technology project.  I support their endeavor and hope it is wildly successful.

Check out the Request for Proposal to learn more.

What do you think of all this??  Please comment below.

73 replies
  1. Mike
    Mike says:

    It will be interesting to see how this plays out. I am very interested to see how the software companies respond (Instant Software, Escapia, LiveRez, RealTimeRentals and Barefoot). I imagine they will not be very excited about this due to the potential loss of revenue.

    Do you know who will own “The Switch”? Is it going to VRMA? or is it going to be open source?

  2. Trent
    Trent says:

    Mike,
    I agree they won’t be excited. But, as a fellow supplier told me today, some of these guys are “strangling the market” by treating the VRMs data as if it is their own data and not only withholding it from VRMs but also monetizing through back-door deals. Some of them may indeed be excited because they can compete more fairly on the actual features and benefits of their software rather than the distribution arrangements negotiated. I bet that smaller PMS will benefit. Also, I would expect a flurry of new offerings that can add value to VRMs once their data is “unlocked.”

    In terms of ownership, VRMA said it would be operated a non-profit owned by VRMA. Any revenue generated would be used to fund the day-to-day technology and promote the vacation rental industry itself.

  3. Trent
    Trent says:

    Mike,
    I agree they won’t be excited. But, as a fellow supplier told me today, some of these guys are “strangling the market” by treating the VRMs data as if it is their own data and not only withholding it from VRMs but also monetizing through back-door deals. Some of them may indeed be excited because they can compete more fairly on the actual features and benefits of their software rather than the distribution arrangements negotiated. I bet that smaller PMS will benefit. Also, I would expect a flurry of new offerings that can add value to VRMs once their data is “unlocked.”

    In terms of ownership, VRMA said it would be operated a non-profit owned by VRMA. Any revenue generated would be used to fund the day-to-day technology and promote the vacation rental industry itself.

  4. Jim Lang
    Jim Lang says:

    This sounds like a monster project. The technology hurdles and the cost could easily sink it. Is VRMA really sophisticated enough to pull this off?

  5. Jim Lang
    Jim Lang says:

    This sounds like a monster project. The technology hurdles and the cost could easily sink it. Is VRMA really sophisticated enough to pull this off?

  6. Ron Purser
    Ron Purser says:

    New entities keep popping up all the time to take another slice of the pie. Still the time required to get your inventory out there + keep all the required information up to date could stand to be streamlined across the board in the grand scheme of things.

    VRMA is well positioned to make a difference if they can implement initiatives efficiently and avoid the temptation to monetize it for the benefit of the few rather than control costs for the benefit of the member PM’s. No doubt they are in a iposition to broker agreements with many of the industry software providers if they had a mind to.

  7. Ron Purser
    Ron Purser says:

    New entities keep popping up all the time to take another slice of the pie. Still the time required to get your inventory out there + keep all the required information up to date could stand to be streamlined across the board in the grand scheme of things.

    VRMA is well positioned to make a difference if they can implement initiatives efficiently and avoid the temptation to monetize it for the benefit of the few rather than control costs for the benefit of the member PM’s. No doubt they are in a iposition to broker agreements with many of the industry software providers if they had a mind to.

  8. Randy Zats
    Randy Zats says:

    As an individual condo owner, the only effect I would see if this were to happen is possibly more bookings coming from my manager.

    If I understand the concept, it is to enable the the consumer to book an individual vacation rental on, for example, American Express.com.

    As we know, The fundamental difference in hotels vs. vacation rentals is that in the latter each unit is individually owned. In addition, it might be owner managed or independent property manager managed.

    While consolidation works with major chain hotels because each room has consistent standards (you know what you’re getting), rentals are not cookie cutters of each other.

    In my opinion, priority one is creating a universal rating standard like Michelin, educating property managers (and their owners) extensively to use it, and then promoting it to the public as a selling tool. (I would love to say I have a unit that has the XYZ rating system’s highest rank). That would be feasible and appropriate for an industry group.

    There is no lack of websites for consumers to rent out my vacation rental. One Google search of vacation rental provides many, many links. The problem is not lack of places to ‘sell’ rentals, but rather matching the consumer’s needs with the right home. Generally these are not $66 one-night rentals near an airport, but could be $3,000 and the only vacation a family has all year.

    Sorry I’m not gushy about rushing into a new technology solution. but I think we need to look at what we’re selling, not just selling it in more places.

  9. Randy Zats
    Randy Zats says:

    As an individual condo owner, the only effect I would see if this were to happen is possibly more bookings coming from my manager.

    If I understand the concept, it is to enable the the consumer to book an individual vacation rental on, for example, American Express.com.

    As we know, The fundamental difference in hotels vs. vacation rentals is that in the latter each unit is individually owned. In addition, it might be owner managed or independent property manager managed.

    While consolidation works with major chain hotels because each room has consistent standards (you know what you’re getting), rentals are not cookie cutters of each other.

    In my opinion, priority one is creating a universal rating standard like Michelin, educating property managers (and their owners) extensively to use it, and then promoting it to the public as a selling tool. (I would love to say I have a unit that has the XYZ rating system’s highest rank). That would be feasible and appropriate for an industry group.

    There is no lack of websites for consumers to rent out my vacation rental. One Google search of vacation rental provides many, many links. The problem is not lack of places to ‘sell’ rentals, but rather matching the consumer’s needs with the right home. Generally these are not $66 one-night rentals near an airport, but could be $3,000 and the only vacation a family has all year.

    Sorry I’m not gushy about rushing into a new technology solution. but I think we need to look at what we’re selling, not just selling it in more places.

  10. trent
    trent says:

    thanks Randy,

    I think you are right about a universal rating system being a priority (although I wouldn’t put it at 1). I believe it is a total no-go though in the industry. Pretty much dead in the water! One of the reasons it is dead is because of individual condo or home owners who historically have pushed back at having their units reviewed and rated. They don’t want to pay the fee and they definitely don’t like it when the reviewer criticizes their property’s decor, appliances, age, etc. Managers don’t always like it either because they don’t like to lose control of how their properties are talked about out on the Internet. Flipkey is the closest solution to that right now, but it is hardly Michelin. Like you, I would love to see it, but I just don’t see anyone out there pushing it.

    In terms of the VR websites … let me help you read between the lines…. one of the major concerns they are addressing is that the VRM industry will lose control of its own brand/inventory to powerful third party distributors. This happened in a BIG way 10 years ago with hotels.com in hotel industry. Hotels.com could literally tell hotels what to do. So, to put it bluntly, VRMs don’t want Homeaway and Tripadvisor to own the “vacation rental’ brand. Many in the industry believe, that if VRMs don’t step up to the plate and start swinging, that Homeaway will become THE source of vacation home inventory for the world and ITS “switch” will own the market.

    Another guiding philosophy I think is that there IS a lack of vacation rental websites…. from an industry branding perspective, not enough vacationers are considering rental homes and condos yet. VRMA wants every vacation searcher, now matter where they search, to have a choice of a rental or a hotel. In many major lodging portals (Expedia, AMeX, Orbitz, HOtels.com, Priceline, ETC) there is a total lack of vacation homes. So, it is isn’t about making more websites that specialize in listing vacation homes, it is about putting Vacation homes into the same ballpark as hotels.

  11. trent
    trent says:

    thanks Randy,

    I think you are right about a universal rating system being a priority (although I wouldn’t put it at 1). I believe it is a total no-go though in the industry. Pretty much dead in the water! One of the reasons it is dead is because of individual condo or home owners who historically have pushed back at having their units reviewed and rated. They don’t want to pay the fee and they definitely don’t like it when the reviewer criticizes their property’s decor, appliances, age, etc. Managers don’t always like it either because they don’t like to lose control of how their properties are talked about out on the Internet. Flipkey is the closest solution to that right now, but it is hardly Michelin. Like you, I would love to see it, but I just don’t see anyone out there pushing it.

    In terms of the VR websites … let me help you read between the lines…. one of the major concerns they are addressing is that the VRM industry will lose control of its own brand/inventory to powerful third party distributors. This happened in a BIG way 10 years ago with hotels.com in hotel industry. Hotels.com could literally tell hotels what to do. So, to put it bluntly, VRMs don’t want Homeaway and Tripadvisor to own the “vacation rental’ brand. Many in the industry believe, that if VRMs don’t step up to the plate and start swinging, that Homeaway will become THE source of vacation home inventory for the world and ITS “switch” will own the market.

    Another guiding philosophy I think is that there IS a lack of vacation rental websites…. from an industry branding perspective, not enough vacationers are considering rental homes and condos yet. VRMA wants every vacation searcher, now matter where they search, to have a choice of a rental or a hotel. In many major lodging portals (Expedia, AMeX, Orbitz, HOtels.com, Priceline, ETC) there is a total lack of vacation homes. So, it is isn’t about making more websites that specialize in listing vacation homes, it is about putting Vacation homes into the same ballpark as hotels.

  12. roman
    roman says:

    Great project, I’d love to be in, although the bulk of my properties is in Europe, will they open the system to Europe too?

    I’m going to spread the word.

    I think the VR market really needs this kind of ‘oversight’, I think VRMA is really going the right direction and is pretty much the only one organization doing it. Again, if you guys need a bridge to Europe I’ll be eager to help.

  13. roman
    roman says:

    Great project, I’d love to be in, although the bulk of my properties is in Europe, will they open the system to Europe too?

    I’m going to spread the word.

    I think the VR market really needs this kind of ‘oversight’, I think VRMA is really going the right direction and is pretty much the only one organization doing it. Again, if you guys need a bridge to Europe I’ll be eager to help.

  14. Shari Goldstein
    Shari Goldstein says:

    I am so impressed and thrilled with the Board and VRMA taking on this huge endeavor. Thanks Trent for your post!!!! I am looking forward to the day when we will have brand identity and Switch rolls off of our consumers’ tongues.

  15. Shari Goldstein
    Shari Goldstein says:

    I am so impressed and thrilled with the Board and VRMA taking on this huge endeavor. Thanks Trent for your post!!!! I am looking forward to the day when we will have brand identity and Switch rolls off of our consumers’ tongues.

  16. Bob Serrell
    Bob Serrell says:

    As usual the VRMA is too late and too selfish. A true multiple-listing-service has already been released by the Vacation Rental Industry Association (www.VRIA.org) a not-for-profit association open to Owners as well as managers. Its in Beta but very functional.

    The VRMA announcement reads like a war on owners and non-VRMA members. There are real problems caused by software companies and a small number of website publishers – that is the only problem.

    Real Estate Industry MLS’s work because anyone can join the MLS. They don’t have to be members of Realtors or any regional group. The cost is modest and the distribution very wide.

    VRIA’s goals are far more direct allowing true “Open submission” and “Open Distribution” to ALL owners, managers, suppiers and publishers. The cost is far lower and the bureaucracy far less.

    Serious owners and managers should join VRIA and participate as leaders if they won’t to direct their own destinys.

  17. Bob Serrell
    Bob Serrell says:

    As usual the VRMA is too late and too selfish. A true multiple-listing-service has already been released by the Vacation Rental Industry Association (www.VRIA.org) a not-for-profit association open to Owners as well as managers. Its in Beta but very functional.

    The VRMA announcement reads like a war on owners and non-VRMA members. There are real problems caused by software companies and a small number of website publishers – that is the only problem.

    Real Estate Industry MLS’s work because anyone can join the MLS. They don’t have to be members of Realtors or any regional group. The cost is modest and the distribution very wide.

    VRIA’s goals are far more direct allowing true “Open submission” and “Open Distribution” to ALL owners, managers, suppiers and publishers. The cost is far lower and the bureaucracy far less.

    Serious owners and managers should join VRIA and participate as leaders if they won’t to direct their own destinys.

  18. Charles Rhodes
    Charles Rhodes says:

    Throw a pebble and watch the ripple!

    Thanks Trent Blizzard for the heads up. Having attended the VRMA East Conference and hearing the discussions at the conference, I personally have realized the invaluable measure this VRMA SWITCH could mean to the lodging industry. With that said, what I saw in the VRMA East conference was key VRMA vendors and staff sharing a quick runover of the SWITCH with less than 2 hours tops to include questions and answers from VRMA members hearing of this for the first time.

    Use the expert Management and in-house IT expertise of the VRMA businesses to run this project through the ringer. Enable an electronic Board Room Login, on the VRMA website. Place objectives and planned outcomes of the project up for input and question. After a resonable time frame, gather up all the input and reformulate, surely there will be changes. Run the whole thing through the same steps once more. The results will greatly represent the VRMA industry as a whole and will pass the feeling of ownership and loyalty in ensuring the success of the VRMA SWITCH.

  19. Charles Rhodes
    Charles Rhodes says:

    Throw a pebble and watch the ripple!

    Thanks Trent Blizzard for the heads up. Having attended the VRMA East Conference and hearing the discussions at the conference, I personally have realized the invaluable measure this VRMA SWITCH could mean to the lodging industry. With that said, what I saw in the VRMA East conference was key VRMA vendors and staff sharing a quick runover of the SWITCH with less than 2 hours tops to include questions and answers from VRMA members hearing of this for the first time.

    Use the expert Management and in-house IT expertise of the VRMA businesses to run this project through the ringer. Enable an electronic Board Room Login, on the VRMA website. Place objectives and planned outcomes of the project up for input and question. After a resonable time frame, gather up all the input and reformulate, surely there will be changes. Run the whole thing through the same steps once more. The results will greatly represent the VRMA industry as a whole and will pass the feeling of ownership and loyalty in ensuring the success of the VRMA SWITCH.

  20. Ethel Rio
    Ethel Rio says:

    These are exciting times for the VR sector. However, I do caution against the treat of an oligopoly rather than a monopoly within the sector. The concentration of market share to 3, or 4 of the largest firms in this sector may, in some situations, employ restrictive trade practices (collusion, market sharing etc.) that have a profound influence on prices, and competition, while it restricts production, innovation, etc. in much the same way as a monopoly. Firms often collude in an attempt to stabilize unstable markets, so as to reduce the risks inherent in these markets for investment and product development.

    In other situations, competition between property managers can be fierce, with relatively low prices and even lower production. The competition can be greater since PM’s are only regionally based, and compete directly with each other. As in the airline, and hotel business (and unlike the car rental business) I see a proliferation of groups that provide “GDS,” “IDX,” “Switch,” and/or inventory distribution services, where those gate-keepers, with their standards, don’t allow everyone to play nice with one another. I predict this will be the first of many inventory distribution exchanges.

  21. Ethel Rio
    Ethel Rio says:

    These are exciting times for the VR sector. However, I do caution against the treat of an oligopoly rather than a monopoly within the sector. The concentration of market share to 3, or 4 of the largest firms in this sector may, in some situations, employ restrictive trade practices (collusion, market sharing etc.) that have a profound influence on prices, and competition, while it restricts production, innovation, etc. in much the same way as a monopoly. Firms often collude in an attempt to stabilize unstable markets, so as to reduce the risks inherent in these markets for investment and product development.

    In other situations, competition between property managers can be fierce, with relatively low prices and even lower production. The competition can be greater since PM’s are only regionally based, and compete directly with each other. As in the airline, and hotel business (and unlike the car rental business) I see a proliferation of groups that provide “GDS,” “IDX,” “Switch,” and/or inventory distribution services, where those gate-keepers, with their standards, don’t allow everyone to play nice with one another. I predict this will be the first of many inventory distribution exchanges.

  22. trent
    trent says:

    Ethel,
    Thanks. I think your predictions man indeed already be happening. There are a few classes of “switches” happenning right now.

    The first group are PMS companies with their “captive” inventory — Escapia, LiveRez, ISIlink, RealtimeRentals, Rent1Online (and others I am sure) are already combining their client’s inventory and offering for distribution with varying degrees of success. They aren’t collaborating with each other (yet).

    The second group are the equivalent of OTAs which are also creating switches of data/inventory with varying degrees of success: Tripadivisor/flipkey, Homeaway, Zonder, LeisureLink and Vast to name a few that come to mind.

    They all have different rules on who can access the data, the rates they charge (both upstream and downstream), how they get their data (direct connectoins, manual input, screen scraping) and whether they even have live “bookable” inventory vs just listings.

    Proliferation may be they optimal descripto here.

    I think VRMA is seeing the “control” slipping from the actual owners of the inventory to these “switches” and is taking a step take control back. Vacation Rental Managers are pretty upset that others are monetizing THEIR inventory in ways they don’t approve. They are upset that sites use THEIR words and photos to capture customers and sell them back to them.

  23. trent
    trent says:

    Ethel,
    Thanks. I think your predictions man indeed already be happening. There are a few classes of “switches” happenning right now.

    The first group are PMS companies with their “captive” inventory — Escapia, LiveRez, ISIlink, RealtimeRentals, Rent1Online (and others I am sure) are already combining their client’s inventory and offering for distribution with varying degrees of success. They aren’t collaborating with each other (yet).

    The second group are the equivalent of OTAs which are also creating switches of data/inventory with varying degrees of success: Tripadivisor/flipkey, Homeaway, Zonder, LeisureLink and Vast to name a few that come to mind.

    They all have different rules on who can access the data, the rates they charge (both upstream and downstream), how they get their data (direct connectoins, manual input, screen scraping) and whether they even have live “bookable” inventory vs just listings.

    Proliferation may be they optimal descripto here.

    I think VRMA is seeing the “control” slipping from the actual owners of the inventory to these “switches” and is taking a step take control back. Vacation Rental Managers are pretty upset that others are monetizing THEIR inventory in ways they don’t approve. They are upset that sites use THEIR words and photos to capture customers and sell them back to them.

  24. Tracy Lotz
    Tracy Lotz says:

    Trent,

    Thanks for the dialog. I think you are right on many fronts but I have to say Trent you have made some pretty serious allegations and have taken some pretty cheap shots at the software companies.

    When you make this statement, who are you talking about? Trent says:“But, as a fellow supplier told me today, some of these guys are “strangling the market” by treating the VRMs data as if it is their own data and not only withholding it from VRMs but also monetizing through back-door deals.”

    Trent, making a blanket accusation like that without being specific is pretty cowardly. A fellow supplier told you “today” that “some of these guys are strangling the market”. Please Trent, if the spirit of openness and transparency tell us who told you this and who is guilty of this?

    Have you read VRMA’s code of ethics regarding making unfounded and unsolicited comments about other members?

    OK Trent, now that I have that I have that off my chest let me tell you that since January the owners and/or CEO’s of many of the software companies have been meeting and discussing the possibility of a VRMA switch. In the interest of transparency and openness they are myself at LiveRez, Dave Hopcroft at Instant Software, Bill Furlong at Escapia, Ed Ulmer from Barefoot, Bob Ackerman at RNS ad Pete Wenk from VRM.

    ALL OF US are excited about the possibility of the switch. Some have expressed concerns about the process and how to do it but NONE are not happy about the concept.

    Trent we are all in this together. All of us are small businesses trying to do good things for the industry. I like you a lot and have a lot of respect for what you do. Doing what we do (the software companies) is a daunting task, making our software work for as many different managers and business models as possible. Every owner or CEO is a hard working entrepreneur and we all have the best interests of the industry at heart. In the spirit of fairness and cooperation please show us fellow VRMA members some respect.

    Respectfully submitted,

    Tracy Lotz
    Founder/CEO
    LiveRez inc.
    http://LiveRez.com

  25. Tracy Lotz
    Tracy Lotz says:

    Trent,

    Thanks for the dialog. I think you are right on many fronts but I have to say Trent you have made some pretty serious allegations and have taken some pretty cheap shots at the software companies.

    When you make this statement, who are you talking about? Trent says:“But, as a fellow supplier told me today, some of these guys are “strangling the market” by treating the VRMs data as if it is their own data and not only withholding it from VRMs but also monetizing through back-door deals.”

    Trent, making a blanket accusation like that without being specific is pretty cowardly. A fellow supplier told you “today” that “some of these guys are strangling the market”. Please Trent, if the spirit of openness and transparency tell us who told you this and who is guilty of this?

    Have you read VRMA’s code of ethics regarding making unfounded and unsolicited comments about other members?

    OK Trent, now that I have that I have that off my chest let me tell you that since January the owners and/or CEO’s of many of the software companies have been meeting and discussing the possibility of a VRMA switch. In the interest of transparency and openness they are myself at LiveRez, Dave Hopcroft at Instant Software, Bill Furlong at Escapia, Ed Ulmer from Barefoot, Bob Ackerman at RNS ad Pete Wenk from VRM.

    ALL OF US are excited about the possibility of the switch. Some have expressed concerns about the process and how to do it but NONE are not happy about the concept.

    Trent we are all in this together. All of us are small businesses trying to do good things for the industry. I like you a lot and have a lot of respect for what you do. Doing what we do (the software companies) is a daunting task, making our software work for as many different managers and business models as possible. Every owner or CEO is a hard working entrepreneur and we all have the best interests of the industry at heart. In the spirit of fairness and cooperation please show us fellow VRMA members some respect.

    Respectfully submitted,

    Tracy Lotz
    Founder/CEO
    LiveRez inc.
    http://LiveRez.com

  26. Ron
    Ron says:

    I agree with many aspects of your last two posts Trent as I see a lot of the changes unfolding in real time in a very similar manner as you do.

    In addition, it seems to me that growing more nuanced regional markets along with the existing national/international monster networks could provide a greater “safety in numbers as many fishing lines in as many quality fishing holes as possible” vehicle if the switch could be accessible across all these networks

    Aggregating all the VR inventory in a controlled manner in some sort of super directory, national and international in scope to benefit the few exclusively is not a good idea from my own self serving perspective if it trumps my own marketing efforts of our inventory of vacation homes.

    Tom Botts “Clear and Present Danger” keynote address at a recent VRMA meeting I heard was not lost on me. The off the scale distribution costs as a result of being asleep at the switch the hotel industry experienced was compelling. The remedies Tom touched on in overcoming the challenges of well funded networks gaining dominant market share in a fragmented industry like our own were reasonable.

    Many of us have invested substantial dollars in building our respective brands over the years and decades. My rhetorical question would be why should part time vacation rental owners that can’t sell their second home inventory in a depressed real estate cycle be able to enter the VR market place as equals of the professional providers of vacation rental lodging when they will quickly retire from the industry after selling their homes?

    Those of us that are the players in our specific markets have had to pay our dues over the years to reach that plateau. So of course many of us would protect our branding efforts as well as embrace time saving operational upgrades.

  27. Ron
    Ron says:

    I agree with many aspects of your last two posts Trent as I see a lot of the changes unfolding in real time in a very similar manner as you do.

    In addition, it seems to me that growing more nuanced regional markets along with the existing national/international monster networks could provide a greater “safety in numbers as many fishing lines in as many quality fishing holes as possible” vehicle if the switch could be accessible across all these networks

    Aggregating all the VR inventory in a controlled manner in some sort of super directory, national and international in scope to benefit the few exclusively is not a good idea from my own self serving perspective if it trumps my own marketing efforts of our inventory of vacation homes.

    Tom Botts “Clear and Present Danger” keynote address at a recent VRMA meeting I heard was not lost on me. The off the scale distribution costs as a result of being asleep at the switch the hotel industry experienced was compelling. The remedies Tom touched on in overcoming the challenges of well funded networks gaining dominant market share in a fragmented industry like our own were reasonable.

    Many of us have invested substantial dollars in building our respective brands over the years and decades. My rhetorical question would be why should part time vacation rental owners that can’t sell their second home inventory in a depressed real estate cycle be able to enter the VR market place as equals of the professional providers of vacation rental lodging when they will quickly retire from the industry after selling their homes?

    Those of us that are the players in our specific markets have had to pay our dues over the years to reach that plateau. So of course many of us would protect our branding efforts as well as embrace time saving operational upgrades.

  28. Dave Hopcroft
    Dave Hopcroft says:

    In the almost 20 years I have been in this industry – this is, probably, my 3rd blog post. Usually I prefer to listen to the opinion of the industry and learn from the combined experiences of the posters. However, this is such a dangerous topic for our industry with so much self-serving hypocrisy being used to justify hidden agendas that I am compelled to state my position.

    First, let me declare my interests: I am the CEO and co-founder of Instant Software and almost eight years ago I, personally, conceived the idea ISILink – our switch. My thought at that time, was to connect as many Property Management Companies (PMC) to as many distributors as possible…….period! Over the years it has developed in multiple directions – all dictated by the market, the industry and its users.

    In the last 4 years, or so, ISILink has facilitated more than 7,000,000 reservations representing almost $2 billion of reservation value. During that time ISI has never charged the PMC one cent for connection to the hundreds of websites securing the reservations for our clients. Instant Software charges $5 per property per year to the distributor – yes that’s right 10 cents per week per property.

    From my discussions with VRMA and reading their recent ‘Declaration of Independence’ it appears to me that their stated aim is to create a switch that will, amongst other things:
    • “Protect the industry”
    • “Require that all distribution channel partners who access the inventory abide by a set of rules…..”
    • “Avoid a “choke point” in the industry that would allow any one party to take advantage of the industry”

    Protect the industry –
    From what? Itself?…. I have regular conversations with the leaders of other software companies in this industry – I am certainly not aware of any PMC that has been ‘forced’ to list their properties with any distributor at terms unacceptable to the PMC. With Instant Software every PMC chooses which individual properties are listed with which distributor – and the PMC can (with the click of a mouse button) turn on or off any properties/distributors.

    Require that all distribution channel partners who access the inventory abide by a set of rules –
    Or what? That channel partner will be disallowed from using the switch? By their own figures, I believe that VRMA represents around 10% of the professional rental industry… That is a little like King Cnut trying to hold back the tide! If a distributor (say Expedia) does not comply with the rules dictated by VRMA, then what? Expedia is cut-off from the properties in the switch? And? Who do you think will feel the most pain? Expedia (who will simply access the other 90% through some other means) or the 10% of the industry who then will not be able to get bookings?

    Avoid a “choke point” in the industry that would allow any one party to take advantage of the industry –
    isn’t this exactly what is being suggested by forming a switch which can be used to turn on and off the flow of properties if it’s rules are not followed? Doesn’t the creation of a committee which controls a single switch – with the power to turn it off – represent a choke-point?

    Ever worked with a group that is not-for-profit and cannot be sold? The closest I can think of to that is a Government! So, if they are ‘not-for-profit’ what will dictate their decisions? Will they work in the best interests of the industry?…. In whose opinion (of what is best for the industry)? What will happen when PMC’s are hurting for reservations – but the ‘committee’ turns off distribution to the big OTA’s … because the distributors ‘would not comply with the rules set by the committee that represents 10% of the industry”? Will the PMC’s simply use another switch? Nope, this move by VRMA requires that they are the only switch….. That is rather like giving the keys to your inventory to a group who can dictate where and under what terms your properties can flow to the market…. a more unkind person might call that a ‘monopolistic choke-point’

    ISILink connects other software products (not owned by ISI) to any channel partner distributor, for example, we connect 30,000+ European properties from a software system owned by a Swiss company. The only rules we set are: That the PMC controls the flow of the inventory based upon the deal struck directly between the PMC and the distributor…. That the distributor complies with ISI’s standards of data use/storage (security, no onward distribution – or the PMC loses control of its availability – etc)…..

    Beware of a ‘wolf in sheep’s clothing’…..
    To the best of my knowledge almost every software company seeks not to control the availability in the industry – but rather to simply facilitate its wider distribution. The software companies make their living by selling and supporting their products…. this is best achieved by a healthy industry with as many bookings as possible. The healthier the industry is – the more product software companies can sell!

    Anyone who suggests they want to control the industry – or they will stop the flow of PMC reservations is NOT assisting this industry – they are jeopardizing the very lifeblood of the PMC….. guests reserving the properties!

    Finally – my recommendation would be that you read the book “What would Google do”…. then decide about the wisdom of ‘corralling’ and ‘controlling’ data….. The Internet and the market require the free-flow of data… not a group of people setting rules under which they can arbitrarily turn on or off reservations.

  29. Dave Hopcroft
    Dave Hopcroft says:

    In the almost 20 years I have been in this industry – this is, probably, my 3rd blog post. Usually I prefer to listen to the opinion of the industry and learn from the combined experiences of the posters. However, this is such a dangerous topic for our industry with so much self-serving hypocrisy being used to justify hidden agendas that I am compelled to state my position.

    First, let me declare my interests: I am the CEO and co-founder of Instant Software and almost eight years ago I, personally, conceived the idea ISILink – our switch. My thought at that time, was to connect as many Property Management Companies (PMC) to as many distributors as possible…….period! Over the years it has developed in multiple directions – all dictated by the market, the industry and its users.

    In the last 4 years, or so, ISILink has facilitated more than 7,000,000 reservations representing almost $2 billion of reservation value. During that time ISI has never charged the PMC one cent for connection to the hundreds of websites securing the reservations for our clients. Instant Software charges $5 per property per year to the distributor – yes that’s right 10 cents per week per property.

    From my discussions with VRMA and reading their recent ‘Declaration of Independence’ it appears to me that their stated aim is to create a switch that will, amongst other things:
    • “Protect the industry”
    • “Require that all distribution channel partners who access the inventory abide by a set of rules…..”
    • “Avoid a “choke point” in the industry that would allow any one party to take advantage of the industry”

    Protect the industry –
    From what? Itself?…. I have regular conversations with the leaders of other software companies in this industry – I am certainly not aware of any PMC that has been ‘forced’ to list their properties with any distributor at terms unacceptable to the PMC. With Instant Software every PMC chooses which individual properties are listed with which distributor – and the PMC can (with the click of a mouse button) turn on or off any properties/distributors.

    Require that all distribution channel partners who access the inventory abide by a set of rules –
    Or what? That channel partner will be disallowed from using the switch? By their own figures, I believe that VRMA represents around 10% of the professional rental industry… That is a little like King Cnut trying to hold back the tide! If a distributor (say Expedia) does not comply with the rules dictated by VRMA, then what? Expedia is cut-off from the properties in the switch? And? Who do you think will feel the most pain? Expedia (who will simply access the other 90% through some other means) or the 10% of the industry who then will not be able to get bookings?

    Avoid a “choke point” in the industry that would allow any one party to take advantage of the industry –
    isn’t this exactly what is being suggested by forming a switch which can be used to turn on and off the flow of properties if it’s rules are not followed? Doesn’t the creation of a committee which controls a single switch – with the power to turn it off – represent a choke-point?

    Ever worked with a group that is not-for-profit and cannot be sold? The closest I can think of to that is a Government! So, if they are ‘not-for-profit’ what will dictate their decisions? Will they work in the best interests of the industry?…. In whose opinion (of what is best for the industry)? What will happen when PMC’s are hurting for reservations – but the ‘committee’ turns off distribution to the big OTA’s … because the distributors ‘would not comply with the rules set by the committee that represents 10% of the industry”? Will the PMC’s simply use another switch? Nope, this move by VRMA requires that they are the only switch….. That is rather like giving the keys to your inventory to a group who can dictate where and under what terms your properties can flow to the market…. a more unkind person might call that a ‘monopolistic choke-point’

    ISILink connects other software products (not owned by ISI) to any channel partner distributor, for example, we connect 30,000+ European properties from a software system owned by a Swiss company. The only rules we set are: That the PMC controls the flow of the inventory based upon the deal struck directly between the PMC and the distributor…. That the distributor complies with ISI’s standards of data use/storage (security, no onward distribution – or the PMC loses control of its availability – etc)…..

    Beware of a ‘wolf in sheep’s clothing’…..
    To the best of my knowledge almost every software company seeks not to control the availability in the industry – but rather to simply facilitate its wider distribution. The software companies make their living by selling and supporting their products…. this is best achieved by a healthy industry with as many bookings as possible. The healthier the industry is – the more product software companies can sell!

    Anyone who suggests they want to control the industry – or they will stop the flow of PMC reservations is NOT assisting this industry – they are jeopardizing the very lifeblood of the PMC….. guests reserving the properties!

    Finally – my recommendation would be that you read the book “What would Google do”…. then decide about the wisdom of ‘corralling’ and ‘controlling’ data….. The Internet and the market require the free-flow of data… not a group of people setting rules under which they can arbitrarily turn on or off reservations.

  30. George Wu
    George Wu says:

    Isn’t the proposed VRMA Switch a Pegasus redux? Pegasus was conceived as a hotel switch built by a consortium of major hotel chains.

    Some 30 years later, I would say that Pegasus has met some of it’s original goals, but VRMA would do well to study their history and talk to some hotel CIOs to set realistic expectations.

  31. George Wu
    George Wu says:

    Isn’t the proposed VRMA Switch a Pegasus redux? Pegasus was conceived as a hotel switch built by a consortium of major hotel chains.

    Some 30 years later, I would say that Pegasus has met some of it’s original goals, but VRMA would do well to study their history and talk to some hotel CIOs to set realistic expectations.

  32. Jason Couillard
    Jason Couillard says:

    Well, this will officially be my very first blog post as I to, like Mr. Hopcraft, prefer to sit back and learn from all opinions in the industry prior to publicizing a decision of my own.

    First, our company has been in the vacation rental industry for 15+ years now. It has undergone several software conversions and implemented many large acquisitions of other company’s data into the many software programs. In my opinion, VRMA over the years has yet to make a real impact on the industry from a technology or business-growth perspective. I wish them the best in this endeavor.

    I wonder if VRMA is up to this task. Our company has been a proud member of VRMA for many many years. Building this switch, setting it live, troubleshooting/maintaining it and providing support for it will require a REAL effort to complete and efficiently service its users. I truly hope the VRMA team is ready to do so.

    As an owner of a property management company, I may act a bit unorthodox by soundly agreeing with full and complete disclosure of property amenities/rates and reviews thereof. If a guest does not like the property for whatever reason, it is their right to post online. (It is then also the property management company’s right/duty to follow up with a professional and courteous response). An open forum similar to the BBB for the VR industry would be a great service to the public, as well as strengthen the industry by removing those PMCs that do not focus on a quality VR guest experience.

    I encourage VRMA to implement this switch to keep the playing field honest and fair. A true free market enterprise allows and invites all competitors to pursue market share, and the best products and services as deemed by the public will prevail. While the current economy may be driven by lower prices and deals (everyone is looking for a deal these days, right?), a near-future economy will be driven by value and value-added services.

    A consolidated switch controlled by a NPO that services, works for and is in existence because of the VR industry can only create a better solution for the industry.

    I would however like to see controls built-in on the VRMA side that prevent VRMA, its board or anything other than a openly public majority vote of its full member base from capitalizing on this system. Many companies in the current market have driven thru it by raising prices. It would be a shame to see VRMA follow suit or begin controlling the industry instead of simply monitoring and reporting on it.

    Also, our company would choose not to participate if this was the ONLY online lead procurement system to which we could be a part. If VRMA believes in a free marketplace, it must allow its members to list properties in any capacity they so choose.

    And VRMA must be careful that the organization itself does not create a “choke-point” by creating this system. It must open doors through this process, not close them.

    Overall, I’m all in favor. I would like to see an open-source, web-based, 2-way-API-capable solution that invites all to participate willingly and provides the VR guest with the best online booking experience possible.

  33. Jason Couillard
    Jason Couillard says:

    Well, this will officially be my very first blog post as I to, like Mr. Hopcraft, prefer to sit back and learn from all opinions in the industry prior to publicizing a decision of my own.

    First, our company has been in the vacation rental industry for 15+ years now. It has undergone several software conversions and implemented many large acquisitions of other company’s data into the many software programs. In my opinion, VRMA over the years has yet to make a real impact on the industry from a technology or business-growth perspective. I wish them the best in this endeavor.

    I wonder if VRMA is up to this task. Our company has been a proud member of VRMA for many many years. Building this switch, setting it live, troubleshooting/maintaining it and providing support for it will require a REAL effort to complete and efficiently service its users. I truly hope the VRMA team is ready to do so.

    As an owner of a property management company, I may act a bit unorthodox by soundly agreeing with full and complete disclosure of property amenities/rates and reviews thereof. If a guest does not like the property for whatever reason, it is their right to post online. (It is then also the property management company’s right/duty to follow up with a professional and courteous response). An open forum similar to the BBB for the VR industry would be a great service to the public, as well as strengthen the industry by removing those PMCs that do not focus on a quality VR guest experience.

    I encourage VRMA to implement this switch to keep the playing field honest and fair. A true free market enterprise allows and invites all competitors to pursue market share, and the best products and services as deemed by the public will prevail. While the current economy may be driven by lower prices and deals (everyone is looking for a deal these days, right?), a near-future economy will be driven by value and value-added services.

    A consolidated switch controlled by a NPO that services, works for and is in existence because of the VR industry can only create a better solution for the industry.

    I would however like to see controls built-in on the VRMA side that prevent VRMA, its board or anything other than a openly public majority vote of its full member base from capitalizing on this system. Many companies in the current market have driven thru it by raising prices. It would be a shame to see VRMA follow suit or begin controlling the industry instead of simply monitoring and reporting on it.

    Also, our company would choose not to participate if this was the ONLY online lead procurement system to which we could be a part. If VRMA believes in a free marketplace, it must allow its members to list properties in any capacity they so choose.

    And VRMA must be careful that the organization itself does not create a “choke-point” by creating this system. It must open doors through this process, not close them.

    Overall, I’m all in favor. I would like to see an open-source, web-based, 2-way-API-capable solution that invites all to participate willingly and provides the VR guest with the best online booking experience possible.

  34. Jeff Schnaubelt
    Jeff Schnaubelt says:

    If the VRMA can pull this off it’ll help break the strangle hold that the reservation software providers have on property managers data. The VRMA should have done this 10 years ago. The lack of leadership at the VRMA and the hoarding of data by the software companies has cost our industry a lot of money, and has contributed to a huge loss of market share to the rent-by-owners. Consider this… there are about 40 property managers in Lake Tahoe that use about 40 different websites to promote about 1200 vacation rental properties. There is roughly another 1200 rent-by-owners properties, which the public can find by searching just 3 websites (VRBO, Craigslist, and HomeAway). Who has the advantage here? Who’s properties are easier to find and browse? The Rent-By-Owners. We property managers have great individual websites, but our data has been held hostage to a select few software companies that charge big $$ to any website directory or entrepreneur who wants access to our inventory. Why don’t the software companies disclose what they charge for access to our properties? If someone wanted to start a website in Lake Tahoe that would only display professionally managed properties, what do you charge for access to the inventory? I’m not asking what the cost is to the property manager. What do you charge the website owner / entrepreneur who wants our property data?

  35. Jeff Schnaubelt
    Jeff Schnaubelt says:

    If the VRMA can pull this off it’ll help break the strangle hold that the reservation software providers have on property managers data. The VRMA should have done this 10 years ago. The lack of leadership at the VRMA and the hoarding of data by the software companies has cost our industry a lot of money, and has contributed to a huge loss of market share to the rent-by-owners. Consider this… there are about 40 property managers in Lake Tahoe that use about 40 different websites to promote about 1200 vacation rental properties. There is roughly another 1200 rent-by-owners properties, which the public can find by searching just 3 websites (VRBO, Craigslist, and HomeAway). Who has the advantage here? Who’s properties are easier to find and browse? The Rent-By-Owners. We property managers have great individual websites, but our data has been held hostage to a select few software companies that charge big $$ to any website directory or entrepreneur who wants access to our inventory. Why don’t the software companies disclose what they charge for access to our properties? If someone wanted to start a website in Lake Tahoe that would only display professionally managed properties, what do you charge for access to the inventory? I’m not asking what the cost is to the property manager. What do you charge the website owner / entrepreneur who wants our property data?

  36. Trent
    Trent says:

    Jeff, thanks for sharing your comment,

    Dave Hopcroft reported in his comment a few before yours that his company (Instant Software) only charges $5 per rental per year per website that accesses the data. If you managed 500 properties and wanted to share it with 40 different websites, his switch fee would be $500 X $5 X 40 or $100,000. “10 cents a day” adds up fast… and YOUR data is valuable. Numbers like that are clearly prohibitive and HAVE to be passed back to the VRM by the distributor.

    More math: if you want to have a national Vacation Rental directory and have access to the 250,000 vacation properties represented by Dave’s company self reported here you would have to pony up 1.25 MILLION dollars a year. (Go ahead, read that sentence with a Dr Evil imitation

    I don’t know what the other companies charge (if you know or are one of those companies, can you share that with the group?) but I believe pricing like that is going to limit the growth of the industry… I also notice that some software companies are touting many many more “distribution partners” which leads me to believe that they are more “free and open” with their client’s data.

    I can tell you that hotels don’t pay anything even close to that to participate in their industry switches. The MLS switch for Realtors is also not in that ballpark. Their very inexpensive switches have literally created an industry by opening up “inventory” to tens of thousands of entrepreneurs.

    Oh, Don’t forget to add in the Credit Card processing fees and the Travel insurance fees as part of the cost. Jeff, I am curious, do you have a choice on what travel insurance or credit card processing companies you get to use? Do you think your PMS is taking a healthy cut of that too?

  37. Trent
    Trent says:

    Jeff, thanks for sharing your comment,

    Dave Hopcroft reported in his comment a few before yours that his company (Instant Software) only charges $5 per rental per year per website that accesses the data. If you managed 500 properties and wanted to share it with 40 different websites, his switch fee would be $500 X $5 X 40 or $100,000. “10 cents a day” adds up fast… and YOUR data is valuable. Numbers like that are clearly prohibitive and HAVE to be passed back to the VRM by the distributor.

    More math: if you want to have a national Vacation Rental directory and have access to the 250,000 vacation properties represented by Dave’s company you would have to pony up 1.25 MILLION dollars a year. (Go ahead, read that sentence with a Dr Evil imitation

    I don’t know what the other companies charge (if you know or are one of those companies, can you share that with the group?) but I believe pricing like that is going to limit the growth of the industry… I also notice that some software companies are touting many many more “distribution partners” which leads me to believe that they are more “free and open” with their client’s data.

    I can tell you that hotels don’t pay anything even close to that to participate in their industry switches. The MLS switch for Realtors is also not in that ballpark. Their very inexpensive switches have literally created an industry by opening up “inventory” to tens of thousands of entrepreneurs.

    Oh, Don’t forget to add in the Credit Card processing fees and the Travel insurance fees as part of the cost. Jeff, I am curious, do you have a choice on what travel insurance or credit card processing companies you get to use? Do you think your PMS is taking a healthy cut of that too?

  38. George Wu
    George Wu says:

    Having been out of the vacation rental industry for a number of years, I had to find and read Alex Risser’s “Clear and present danger” blog at vrma.com to understand the VRMA’s motivation and goals for creating a VRMA switch. Now that I’ve read that, I’d like to voice a thought or two.

    First, let me be upfront and state my biases. In my case, it would be fair to characterize me as being in the switch company camp. My view of this issue is colored by the fact that I used to work for LeisureLink. I helped start and build LeisureLink, primarily as a software engineer. My title was Chief Technology Officer, and I was aware the technical issues it takes to build a switch, but I also knew a great deal about the business and operations. I left LeisureLink several years ago, but I continue to own equity in the company, and I am a strong advocate for LeisureLink. However, I am expressing my personal opinions and am in no way representing LeisureLink.

    Ok, with the legalese out of the way, I think Tracy Lotz and Dave Hopcraft have pretty well stated the perspective I would have as a fellow software provider. Frankly, a VRMA switch is just another entrant into a market where several of us play. We all roughly understand each others’ businesses, and where the margins are. There’s a decent business in this “switch niche” for more than one of us, but none of us is getting handed piles of cash on a silver platter. Some of us focus on switch services, and others provide other software services and the switch component is just part of the overall offering. We work hard to build and operate our businesses, and will have to keep doing that in the future.

    My first reaction when I heard about the VRMA proposal was, “Why is VRMA coming after the switch companies?” As I said, we’re not rolling in huge fat profits, and there’s enough competition between us that if any one of us were, the competition would quickly undercut anyone commanding such pricing. But now that I’ve read Alex’s blog, I understand it’s not the switch companies that are VRMA’s concern.

    VRMA feels threatened by the travel portals. The concern is that the portals are gaining monopolistic power, able to deliver such a great proportion of their bookings that they can dictate terms to the vacation rental property management companies. Alex proposes to duplicate Orbitz, which was originally founded by several airlines as a counter to the growing dominance of travel portals like Expedia and Travelocity. I see some validity in duplicating Orbitz for the vacation rental industry, however, building a switch is perhaps a misnomer for project. Unless the intent is to build just the switch, and use that to shut off specific travel portals instead of competing directly with a VRMA sponsored retail site. In that case, the switch is really just a choke point fighting the ever growing power of the web.

    One of the great things about the Internet is market efficiency. By that, I mean, the web allows consumers to explore many different ways to purchase a product, and find the best price and packaging to actually purchase that product. If portal ABC is too expensive, the consumer will book through a different portal or on the supplier’s own web site. On the other hand, because portals sell a variety of products from multiple vendors, they can afford the marketing and convenience of one stop shopping that will lure certain segments of the market. E-commerce continues to evolve, in travel and other industries, and new retailers were continue to crop up and build new businesses.

    My point is, the big travel portals have their place in the marketplace. Because of their advertising budgets, and their ability to offer a single place to purchase all of a consumer’s travel needs, they will attract certain consumers. However, to balance them and prevent them from dominating the market, suppliers need other channels. And here, I am not sure VRMA is headed in the right direction. Yes, building an Orbitz like site for the vacation rental industry could counter the market power of the travel portals.

    But I would go further and look what has happened to the airline industry overall. Airlines today generally offer their product on the portals, but they also compete very strongly with their own web sites. Both the portal and the airline direct to consumer web sites are large segments of the market. Some airlines, such as Southwest, go so far as to eschew portals and mostly utilize their own web site.

    For the vacation rental industry, I think there’s a different lesson to be learned from what has happened online in the airline industry over the past decade or so. Likely, there’s a place for travel portal web sites. They won’t be the low cost channel, but because of their size, and convenience, they will be able to deliver a certain portion of the market. But there’s also a need for other consumer retail channels. And, as the supplier, VRMA members ultimately control the product. Competing on price, as well as packaging, are ways to balance the travel portals and counter their dominance.

    I’m not so sure the way to build that channel is a VRMA switch, or a VRMA web site. Well, I am sure that a VRMA switch is not the answer, at least not the whole answer. Travel products are a natural fit for e-commerce, and choking off a productive channel is cutting off your nose to spite your face. The right answer is to create additional competitive ways to reach the consumer, harnessing the growth of the web as a channel instead of trying to restrict and fight it.

    I can think of a whole host of technical and operational things for VRMA to consider, switch or more than switch. However, given the length of this response already, I think I should save that for another day. Suffice it to say that having written the code, as well as built parts of the business, there’s a whole lot that the switch companies offer. Hopefully, VRMA is prepared to chew the rather large bite it’s proposing to take.

  39. George Wu
    George Wu says:

    Having been out of the vacation rental industry for a number of years, I had to find and read Alex Risser’s “Clear and present danger” blog at vrma.com to understand the VRMA’s motivation and goals for creating a VRMA switch. Now that I’ve read that, I’d like to voice a thought or two.

    First, let me be upfront and state my biases. In my case, it would be fair to characterize me as being in the switch company camp. My view of this issue is colored by the fact that I used to work for LeisureLink. I helped start and build LeisureLink, primarily as a software engineer. My title was Chief Technology Officer, and I was aware the technical issues it takes to build a switch, but I also knew a great deal about the business and operations. I left LeisureLink several years ago, but I continue to own equity in the company, and I am a strong advocate for LeisureLink. However, I am expressing my personal opinions and am in no way representing LeisureLink.

    Ok, with the legalese out of the way, I think Tracy Lotz and Dave Hopcraft have pretty well stated the perspective I would have as a fellow software provider. Frankly, a VRMA switch is just another entrant into a market where several of us play. We all roughly understand each others’ businesses, and where the margins are. There’s a decent business in this “switch niche” for more than one of us, but none of us is getting handed piles of cash on a silver platter. Some of us focus on switch services, and others provide other software services and the switch component is just part of the overall offering. We work hard to build and operate our businesses, and will have to keep doing that in the future.

    My first reaction when I heard about the VRMA proposal was, “Why is VRMA coming after the switch companies?” As I said, we’re not rolling in huge fat profits, and there’s enough competition between us that if any one of us were, the competition would quickly undercut anyone commanding such pricing. But now that I’ve read Alex’s blog, I understand it’s not the switch companies that are VRMA’s concern.

    VRMA feels threatened by the travel portals. The concern is that the portals are gaining monopolistic power, able to deliver such a great proportion of their bookings that they can dictate terms to the vacation rental property management companies. Alex proposes to duplicate Orbitz, which was originally founded by several airlines as a counter to the growing dominance of travel portals like Expedia and Travelocity. I see some validity in duplicating Orbitz for the vacation rental industry, however, building a switch is perhaps a misnomer for project. Unless the intent is to build just the switch, and use that to shut off specific travel portals instead of competing directly with a VRMA sponsored retail site. In that case, the switch is really just a choke point fighting the ever growing power of the web.

    One of the great things about the Internet is market efficiency. By that, I mean, the web allows consumers to explore many different ways to purchase a product, and find the best price and packaging to actually purchase that product. If portal ABC is too expensive, the consumer will book through a different portal or on the supplier’s own web site. On the other hand, because portals sell a variety of products from multiple vendors, they can afford the marketing and convenience of one stop shopping that will lure certain segments of the market. E-commerce continues to evolve, in travel and other industries, and new retailers were continue to crop up and build new businesses.

    My point is, the big travel portals have their place in the marketplace. Because of their advertising budgets, and their ability to offer a single place to purchase all of a consumer’s travel needs, they will attract certain consumers. However, to balance them and prevent them from dominating the market, suppliers need other channels. And here, I am not sure VRMA is headed in the right direction. Yes, building an Orbitz like site for the vacation rental industry could counter the market power of the travel portals.

    But I would go further and look what has happened to the airline industry overall. Airlines today generally offer their product on the portals, but they also compete very strongly with their own web sites. Both the portal and the airline direct to consumer web sites are large segments of the market. Some airlines, such as Southwest, go so far as to eschew portals and mostly utilize their own web site.

    For the vacation rental industry, I think there’s a different lesson to be learned from what has happened online in the airline industry over the past decade or so. Likely, there’s a place for travel portal web sites. They won’t be the low cost channel, but because of their size, and convenience, they will be able to deliver a certain portion of the market. But there’s also a need for other consumer retail channels. And, as the supplier, VRMA members ultimately control the product. Competing on price, as well as packaging, are ways to balance the travel portals and counter their dominance.

    I’m not so sure the way to build that channel is a VRMA switch, or a VRMA web site. Well, I am sure that a VRMA switch is not the answer, at least not the whole answer. Travel products are a natural fit for e-commerce, and choking off a productive channel is cutting off your nose to spite your face. The right answer is to create additional competitive ways to reach the consumer, harnessing the growth of the web as a channel instead of trying to restrict and fight it.

    I can think of a whole host of technical and operational things for VRMA to consider, switch or more than switch. However, given the length of this response already, I think I should save that for another day. Suffice it to say that having written the code, as well as built parts of the business, there’s a whole lot that the switch companies offer. Hopefully, VRMA is prepared to chew the rather large bite it’s proposing to take.

  40. Trent
    Trent says:

    George,

    Thx… here is the link to Alex Risser’s Clear and Present Danger blog post you refer to.

  41. Trent
    Trent says:

    George,

    Thx… here is the link to Alex Risser’s Clear and Present Danger blog post you refer to.

  42. Dennis Kambeitz
    Dennis Kambeitz says:

    Trent,

    Thanks for posting on this topic. Also, thanks to everyone else who posted.

    We’ve heard from some VRMs and some top VMS (management software) companies, so I thought I would bring another perspective to the discussion.

    So you know what my perspective is, I am the president of ParadiseHunter.com – one of the distribution channels that will be affected by the outcome of the switch.

    From reading all the posts, it’s clear that there is a great deal of passion and interest in this topic, which is good to see.

    With HomeAway taking the aggressive approach of buying up distribution companies, and the imminent arrival of the OTAs, it’s clear that the vacation rental industry will be fundamentally and irreversibly altered within the next 12-24 months. The management styles, fee structures, and marketing vehicles that were successful just a couple years ago may no longer be successful. For the industry to thrive, it’s going to take a concerted effort and open-mindedness from EVERYONE.

    In this regard, I applaud VRMA for taking the bold step of trying to bring some degree of unified structure to the industry. I’m not sure that “The Switch” on its own is the solution, but it’s an example of the type of thinking that needs to take place. If VRMA wants to make a significant impact and to be able to be the voice of the industry, then they will also need to significantly increase membership.

    I’d also like to applaud all of the management software companies who have worked to find a solution over the past year (thanks for sharing that with everyone, Tracy).

    We’ve worked with some of the top VMSs and I believe that they are genuinely trying to get their customer’s properties as widely distributed as possible. Are the software companies charging distribution companies to access the VRM’s data? Of course they are… and the VRMs should be glad that they do. Someone has to pay for that infrastructure, and if it’s not the distribution companies, then the cost will need to be borne by the VRMs. Simply put – if the Vacation Rental market is to grow, then it requires wider distribution of the listings. That costs money – and it has to come from somewhere.

    In terms of industry growth, I also believe that it’s a little optimistic to assume that The Switch will create a larger pie for the existing players in the market, and that everyone can prosper more with a smaller percentage. Even if the overall pie grows a little, the OTAs will be claiming their seat at the table, and they’ve shown that they have a voracious appetite.

    I believe that “The Switch” may be part of the solution; if implemented quickly and properly. But it must be done in such a way as to not harm the existing software and distribution companies, as these two sectors of the industry will be absolutely critical in maintaining any level of stability for the industry.

    The small fee or percentage that most distribution channels are charging will look like the ‘deal of the century’ if the OTAs are able to drive the existing companies out of business. For comparison, look at how the hotel industry is being squeezed for rates as high as 30%, and they’re a lot better organized and more stable than the Vacation Rental industry.

    If the software companies and existing distribution channels disappear, look for commission rates to increase by 200% to 300%, followed shortly thereafter by the demise of many of the VRMs.

  43. Dennis Kambeitz
    Dennis Kambeitz says:

    Trent,

    Thanks for posting on this topic. Also, thanks to everyone else who posted.

    We’ve heard from some VRMs and some top VMS (management software) companies, so I thought I would bring another perspective to the discussion.

    So you know what my perspective is, I am the president of ParadiseHunter.com – one of the distribution channels that will be affected by the outcome of the switch.

    From reading all the posts, it’s clear that there is a great deal of passion and interest in this topic, which is good to see.

    With HomeAway taking the aggressive approach of buying up distribution companies, and the imminent arrival of the OTAs, it’s clear that the vacation rental industry will be fundamentally and irreversibly altered within the next 12-24 months. The management styles, fee structures, and marketing vehicles that were successful just a couple years ago may no longer be successful. For the industry to thrive, it’s going to take a concerted effort and open-mindedness from EVERYONE.

    In this regard, I applaud VRMA for taking the bold step of trying to bring some degree of unified structure to the industry. I’m not sure that “The Switch” on its own is the solution, but it’s an example of the type of thinking that needs to take place. If VRMA wants to make a significant impact and to be able to be the voice of the industry, then they will also need to significantly increase membership.

    I’d also like to applaud all of the management software companies who have worked to find a solution over the past year (thanks for sharing that with everyone, Tracy).

    We’ve worked with some of the top VMSs and I believe that they are genuinely trying to get their customer’s properties as widely distributed as possible. Are the software companies charging distribution companies to access the VRM’s data? Of course they are… and the VRMs should be glad that they do. Someone has to pay for that infrastructure, and if it’s not the distribution companies, then the cost will need to be borne by the VRMs. Simply put – if the Vacation Rental market is to grow, then it requires wider distribution of the listings. That costs money – and it has to come from somewhere.

    In terms of industry growth, I also believe that it’s a little optimistic to assume that The Switch will create a larger pie for the existing players in the market, and that everyone can prosper more with a smaller percentage. Even if the overall pie grows a little, the OTAs will be claiming their seat at the table, and they’ve shown that they have a voracious appetite.

    I believe that “The Switch” may be part of the solution; if implemented quickly and properly. But it must be done in such a way as to not harm the existing software and distribution companies, as these two sectors of the industry will be absolutely critical in maintaining any level of stability for the industry.

    The small fee or percentage that most distribution channels are charging will look like the ‘deal of the century’ if the OTAs are able to drive the existing companies out of business. For comparison, look at how the hotel industry is being squeezed for rates as high as 30%, and they’re a lot better organized and more stable than the Vacation Rental industry.

    If the software companies and existing distribution channels disappear, look for commission rates to increase by 200% to 300%, followed shortly thereafter by the demise of many of the VRMs.

  44. Tracy Lotz
    Tracy Lotz says:

    Trent,

    I am not quite sure what it is you are trying to do here. On one hand it looks like you are a team player, but then on the other had you continue to take cheap shots at software companies. Are you a for profit company? Don’t you charge companies $10’s of thousands of dollars a year to build websites and to do SEO? I have millions of dollars invested in the LiveRez software platform. How do you suggest we recoup that? If my business model is fair and we provide the services that VRM’s desire we will be successful. If not it’s pretty simple, we will either change or go out of business. No one is being held hostage.

    Last time I checked all of us, you, me and all of the property managers were capitalists, not communists. If your model of charging thousands of dollars per month for SEO works people will continue to pay it. When that model ceases to work they will quit. The same with my model and Dave Hopcroft’s model and the VRM model. Believe me Trent, I am no apologist for Dave Hopcroft. Instant and LiveRez are competitors but there is a greater good at stake here, one that if successfully executed will benefit all of us in the industry and insure prosperity for all into the future.

    My suggestion to you Trent is to A. Go build your own platform and charge whatever you want to. B. Lay down your sword and offer constructive solutions about how to solve the very complex and pressing issues before us.

    As Ben Franklin said to the signers of the Declaration of Independence, “We must all hang together, or most assuredly, we will all hang separately”

    That quote rings as true today as it did 234 years ago.

    Respectfully submitted,

    Tracy Lotz
    CEO/Founder
    LiveRez

  45. Tracy Lotz
    Tracy Lotz says:

    Trent,

    I am not quite sure what it is you are trying to do here. On one hand it looks like you are a team player, but then on the other had you continue to take cheap shots at software companies. Are you a for profit company? Don’t you charge companies $10’s of thousands of dollars a year to build websites and to do SEO? I have millions of dollars invested in the LiveRez software platform. How do you suggest we recoup that? If my business model is fair and we provide the services that VRM’s desire we will be successful. If not it’s pretty simple, we will either change or go out of business. No one is being held hostage.

    Last time I checked all of us, you, me and all of the property managers were capitalists, not communists. If your model of charging thousands of dollars per month for SEO works people will continue to pay it. When that model ceases to work they will quit. The same with my model and Dave Hopcroft’s model and the VRM model. Believe me Trent, I am no apologist for Dave Hopcroft. Instant and LiveRez are competitors but there is a greater good at stake here, one that if successfully executed will benefit all of us in the industry and insure prosperity for all into the future.

    My suggestion to you Trent is to A. Go build your own platform and charge whatever you want to. B. Lay down your sword and offer constructive solutions about how to solve the very complex and pressing issues before us.

    As Ben Franklin said to the signers of the Declaration of Independence, “We must all hang together, or most assuredly, we will all hang separately”

    That quote rings as true today as it did 234 years ago.

    Respectfully submitted,

    Tracy Lotz
    CEO/Founder
    LiveRez

  46. Trent
    Trent says:

    Hi Tracy,

    Thanks again for posting your thoughts. I really do appreciate and value your opinions. Please let me address a few of these concerns.

    I do operate a for profit business and have no intention of being a PMS company… it is not what I do.

    I believe you have the right to operate your business as you see fit…

    My agenda, is a purely whats in it for Blizzard Internet Marketing! It is is simple: We want access to our client’s data with no (unreasonable) strings attached. I am willing to agree to not disclose your proprietary documents and am willing to not backwards engineer your product. It ends there! I want to be able to use my client’s data to do anything they authorize me to do with it. That includes build them a website, build them a custom booking engine, move their data to third parties like Facebook, Google Base, iphones, widgets or Craigslist. I have a problem with being told that in order to access my client’s data data, at their request, I must agree to not provide specific services, not make specific recommendations to my clients and not wear certain colors on Tuesday. I believe the new VRMA vacation rental switch will meet those requirements.

    I will “put down my sword” when that happens. If your agreement for folks like me fits those guidelines, post it here (or a link to your contract) for all to see! I will pimp it on your behalf as an example for the industry to model (and that invitation goes for all your peers too!)

    Secondarily, I am interested in the industry. Don’t forget in your arguments that the VRMA, an association of managers, must think there is a problem or they wouldn’t be addressing this with their own switch, from an industry perspective. I was not part of the group that wrote their “declaration of independence” not was I asked nor did I provide an iota of input. I am intrigued by:
    a) The cost of the switches provided by PMS is sometimes prohibitive. What is your fee structure?
    b) PMS companies that dictate which vendors their clients can do business with. (because they get paid by one vendor to exclude the others typically). Do you prohibit certain vendors from working with your clients?
    c) PMS companies that treat their client’s data like their own. As a group, you are stewards of your client’s data, not owners of it.
    d) Third parties taking “mindshare” in the industry using data owned by VRMs (this whole topic has nothing to do with the PMS companies really)

    Both those secondary industry issues are facts! If you charge X and say your clients can’t do business with Y, then don’t complain when others share those facts with the industry. I was certainly taking a cheap (but satirical and downright funny) shot with my Dr. Evil link in my previous post… but hey, math is math and $1.25 Million is $1.25 Million. Don’t shoot the messenger.

    Instead of making me wrong, please spend more time asking me exactly what do I want to see (I tried to voice that in the paragraphs above)

    I am with Ben Franklin… but I am going to “hang” with VRMA and with my clients, not “hang” with the current suppliers and vendors who aren’t letting Blizzard do its job.

    Thanks again Tracy, lets keep the conversation going and I will work harder at not taking “cheap shots.” If you can answer the question above I posed, I will certainly give you and LiveRez some public props! (same for your peers too!). I will unequivocally support your own data switches when you (and anyone else who does this) presents me with a reasonable data-access contract that lets me do what my customers ask me to do with the data feed.

  47. Trent
    Trent says:

    Hi Tracy,

    Thanks again for posting your thoughts. I really do appreciate and value your opinions. Please let me address a few of these concerns.

    I do operate a for profit business and have no intention of being a PMS company… it is not what I do.

    I believe you have the right to operate your business as you see fit…

    My agenda, is a purely whats in it for Blizzard Internet Marketing! It is is simple: We want access to our client’s data with no (unreasonable) strings attached. I am willing to agree to not disclose your proprietary documents and am willing to not backwards engineer your product. It ends there! I want to be able to use my client’s data to do anything they authorize me to do with it. That includes build them a website, build them a custom booking engine, move their data to third parties like Facebook, Google Base, iphones, widgets or Craigslist. I have a problem with being told that in order to access my client’s data data, at their request, I must agree to not provide specific services, not make specific recommendations to my clients and not wear certain colors on Tuesday. I believe the new VRMA vacation rental switch will meet those requirements.

    I will “put down my sword” when that happens. If your agreement for folks like me fits those guidelines, post it here (or a link to your contract) for all to see! I will pimp it on your behalf as an example for the industry to model (and that invitation goes for all your peers too!)

    Secondarily, I am interested in the industry. Don’t forget in your arguments that the VRMA, an association of managers, must think there is a problem or they wouldn’t be addressing this with their own switch, from an industry perspective. I was not part of the group that wrote their “declaration of independence” not was I asked nor did I provide an iota of input. I am intrigued by:
    a) The cost of the switches provided by PMS is sometimes prohibitive. What is your fee structure?
    b) PMS companies that dictate which vendors their clients can do business with. (because they get paid by one vendor to exclude the others typically). Do you prohibit certain vendors from working with your clients?
    c) PMS companies that treat their client’s data like their own. As a group, you are stewards of your client’s data, not owners of it.
    d) Third parties taking “mindshare” in the industry using data owned by VRMs (this whole topic has nothing to do with the PMS companies really)

    Both those secondary industry issues are facts! If you charge X and say your clients can’t do business with Y, then don’t complain when others share those facts with the industry. I was certainly taking a cheap (but satirical and downright funny) shot with my Dr. Evil link in my previous post… but hey, math is math and $1.25 Million is $1.25 Million. Don’t shoot the messenger.

    Instead of making me wrong, please spend more time asking me exactly what do I want to see (I tried to voice that in the paragraphs above)

    I am with Ben Franklin… but I am going to “hang” with VRMA and with my clients, not “hang” with the current suppliers and vendors who aren’t letting Blizzard do its job.

    Thanks again Tracy, lets keep the conversation going and I will work harder at not taking “cheap shots.” If you can answer the question above I posed, I will certainly give you and LiveRez some public props! (same for your peers too!). I will unequivocally support your own data switches when you (and anyone else who does this) presents me with a reasonable data-access contract that lets me do what my customers ask me to do with the data feed.

  48. Jeff Schnaubelt
    Jeff Schnaubelt says:

    Trent… I’m aware of the restrictions and fees that most of the software companies charge for access to PROPERTY MANAGERS data. But I cannot disclose what I know because of non-disclosure documents my developer was required to sign. I’m in a unique situation because our company is searching for a system to replace our 25 year-old proprietary reservation management software, and at the same time I tried to launch a regional vacation rental website that would help property managers better compete with the rent-by-owners in our area. I’ve had a glimpse of the property management software companies from 2 different angles. As a property manager, I was disgusted to see how they were monetizing & restricting the data with distribution “partners” and not disclosing this fact to me. As a potential distribution “partner”, it was simply disheartening, because the money-grab by the software companies made it financially impossible to go through with the project. One company in particular had astronomical costs and restrictions. This company was not Instant Software. We could have managed the $5 per property that Dave Hopcroft mentioned in his post. But Instant Software controls a very minority portion of the inventory in our region. I understand that the software companies need to make a profit – everyone needs to make a buck. But there really needs to be better transparency here. The VRMA SWITCH will bring this transparency. And it should help loosen up the data by standardizing and lowering access costs.

  49. Jeff Schnaubelt
    Jeff Schnaubelt says:

    Trent… I’m aware of the restrictions and fees that most of the software companies charge for access to PROPERTY MANAGERS data. But I cannot disclose what I know because of non-disclosure documents my developer was required to sign. I’m in a unique situation because our company is searching for a system to replace our 25 year-old proprietary reservation management software, and at the same time I tried to launch a regional vacation rental website that would help property managers better compete with the rent-by-owners in our area. I’ve had a glimpse of the property management software companies from 2 different angles. As a property manager, I was disgusted to see how they were monetizing & restricting the data with distribution “partners” and not disclosing this fact to me. As a potential distribution “partner”, it was simply disheartening, because the money-grab by the software companies made it financially impossible to go through with the project. One company in particular had astronomical costs and restrictions. This company was not Instant Software. We could have managed the $5 per property that Dave Hopcroft mentioned in his post. But Instant Software controls a very minority portion of the inventory in our region. I understand that the software companies need to make a profit – everyone needs to make a buck. But there really needs to be better transparency here. The VRMA SWITCH will bring this transparency. And it should help loosen up the data by standardizing and lowering access costs.

  50. Dave Hopcroft
    Dave Hopcroft says:

    If the following post is a little hard to read: It’s because I am using my Dr, Evil accent!

    Trent says: “If you managed 500 properties and wanted to share it with 40 different websites, his switch fee would be $500 X $5 X 40 or $100,000.”

    Tent – your math’s are impeccable, your logic a little flawed and your motives suspect. You have been in this industry long enough to know that the average number of units managed by a PMC is right around 100. I realize you probably don’t have enough clients to know that most PMC’s distribute on an average of 5 sites…. So, your example might have been more meaningful at 100 properties x$5 x 5 sites = $2,500 per year…. Charged to the distributors, who treat this as a cost of doing business – just like salaries, rent and bandwidth…

    But hey, in true Trent style – never let the facts spoil a good story, so, what if a Property Management Company managed 10,000 properties and distributed them on, say, 300 websites? At $5 per prop per year that would be……. $15,000,000 a year ISI were charging for just that one PMC…. That would have been a far better number for you to try and mislead readers with!

    Trent says (in a subsequent post): “I am willing to agree to not disclose your proprietary documents and am willing to not backwards engineer your product. It…….”

    Looking at motive: It’s time to indentify the elephant in the room, Trent. You say you are willing to agree to the above…. When you voluntarily signed the web agreement with ISI, it clearly stated that you agreed NOT to compete with any product offered by ISI to ISI clients. On that basis we supplied you with proprietary information, gave you technical assistance to establish links to ISI clients so you could build websites and shared certain technical functionality with you that we would not have shared if you had openly stated that you might compete with ISI. Would you share your proprietary information with, say, Blue Tent or VDS?

    Then, I found out that – after working with ISI for more than a year – you had developed a Reservation Engine (the BRE). You and I met to discuss this and you agreed that it ‘might’ be competitive and therefore in breach of our agreement. You agreed you would NOT sell any BRE until you and I worked out a solution….. That was, what, 3 years ago? You never came back to me with any ideas – and you continued to sell a system that takes reservations…… Kinda like ISI does! “Backwards Engendered”?

    At that time I had the option to terminate the agreement between ISI and Blizzard for your clear breach…. But that would have harmed ISI clients, so I chose to do nothing and simply put it down as a learning experience.

    Turning now to your accusations that software companies are strangling the industry and holding to ransom data which is not theirs…. Another interesting position!

    You asked Tracy to declare his contract (and charges?). How about declaring what Blizzard charges its clients to supply the client’s data to a website? Would you be willing to tell readers how much Blizzard charges for the same services that ISI charges $5 per year per prop for?

    Let’s first be clear. Instant Software does not charge Blizzard anything – not 1 penny – for the data ISI supplies to Blizzard

    I have been told that Blizzard charges $6,000 for the booking engine PLUS $500 PER MONTH for up to 200 properties PLUS $100 PER MONTH for each additional 100 properties…. Now, I am not sure those figures are totally correct (perhaps you would be kind enough to correct them if they are inaccurate?) but…

    Using your example of a PMC with 500 properties – Blizzard might charge:

    500 properties (200 = $500 + an additional 300 = $300) would cost the PMC $800 per month! $9,600 per year. If we divide the $9,600 per year by 500 that would be $19.20 PER PROPERTY PER YEAR! almost 4 times what ISI charges….. And let’s be clear, this is not for the website or SEO….. It’s to allow PMC to get reservations for their OWN DATA. Even Dr. Evil can do simple maths!

    ISI charges 40 cents per property per month to the distributor….. Blizzard charges (on the above calculation) $1.60 per month to the PMC: Kinda wondering who is holding the PMC to ransom?

    Trent says: “PMS companies that dictate which vendors their clients can do business with. (because they get paid by one vendor to exclude the others typically). Do you prohibit certain vendors from working with your clients?

    That comment demonstrates either significant naivety or a lack of awareness…. Trent, you should check out deals done (and pending) between VRMA and certain suppliers for exclusive access to data or products offered by VRMA!

    Finally – I have to ask. Given your visible disgust with the ISI distributor charges (10 cents per property per week) – how do you balance that position to your growing relationship with a software company in this industry that charges (I have been told) 50% of the amount the distributor charges? Doesn’t the fact that this ‘other software company’ doubles the distributors’ costs – that “have to be passed back to the PMC” bother you?

  51. Dave Hopcroft
    Dave Hopcroft says:

    If the following post is a little hard to read: It’s because I am using my Dr, Evil accent!

    Trent says: “If you managed 500 properties and wanted to share it with 40 different websites, his switch fee would be $500 X $5 X 40 or $100,000.”

    Tent – your math’s are impeccable, your logic a little flawed and your motives suspect. You have been in this industry long enough to know that the average number of units managed by a PMC is right around 100. I realize you probably don’t have enough clients to know that most PMC’s distribute on an average of 5 sites…. So, your example might have been more meaningful at 100 properties x$5 x 5 sites = $2,500 per year…. Charged to the distributors, who treat this as a cost of doing business – just like salaries, rent and bandwidth…

    But hey, in true Trent style – never let the facts spoil a good story, so, what if a Property Management Company managed 10,000 properties and distributed them on, say, 300 websites? At $5 per prop per year that would be……. $15,000,000 a year ISI were charging for just that one PMC…. That would have been a far better number for you to try and mislead readers with!

    Trent says (in a subsequent post): “I am willing to agree to not disclose your proprietary documents and am willing to not backwards engineer your product. It…….”

    Looking at motive: It’s time to indentify the elephant in the room, Trent. You say you are willing to agree to the above…. When you voluntarily signed the web agreement with ISI, it clearly stated that you agreed NOT to compete with any product offered by ISI to ISI clients. On that basis we supplied you with proprietary information, gave you technical assistance to establish links to ISI clients so you could build websites and shared certain technical functionality with you that we would not have shared if you had openly stated that you might compete with ISI. Would you share your proprietary information with, say, Blue Tent or VDS?

    Then, I found out that – after working with ISI for more than a year – you had developed a Reservation Engine (the BRE). You and I met to discuss this and you agreed that it ‘might’ be competitive and therefore in breach of our agreement. You agreed you would NOT sell any BRE until you and I worked out a solution….. That was, what, 3 years ago? You never came back to me with any ideas – and you continued to sell a system that takes reservations…… Kinda like ISI does! “Backwards Engendered”?

    At that time I had the option to terminate the agreement between ISI and Blizzard for your clear breach…. But that would have harmed ISI clients, so I chose to do nothing and simply put it down as a learning experience.

    Turning now to your accusations that software companies are strangling the industry and holding to ransom data which is not theirs…. Another interesting position!

    You asked Tracy to declare his contract (and charges?). How about declaring what Blizzard charges its clients to supply the client’s data to a website? Would you be willing to tell readers how much Blizzard charges for the same services that ISI charges $5 per year per prop for?

    Let’s first be clear. Instant Software does not charge Blizzard anything – not 1 penny – for the data ISI supplies to Blizzard

    I have been told that Blizzard charges $6,000 for the booking engine PLUS $500 PER MONTH for up to 200 properties PLUS $100 PER MONTH for each additional 100 properties…. Now, I am not sure those figures are totally correct (perhaps you would be kind enough to correct them if they are inaccurate?) but…

    Using your example of a PMC with 500 properties – Blizzard might charge:

    500 properties (200 = $500 + an additional 300 = $300) would cost the PMC $800 per month! $9,600 per year. If we divide the $9,600 per year by 500 that would be $19.20 PER PROPERTY PER YEAR! almost 4 times what ISI charges….. And let’s be clear, this is not for the website or SEO….. It’s to allow PMC to get reservations for their OWN DATA. Even Dr. Evil can do simple maths!

    ISI charges 40 cents per property per month to the distributor….. Blizzard charges (on the above calculation) $1.60 per month to the PMC: Kinda wondering who is holding the PMC to ransom?

    Trent says: “PMS companies that dictate which vendors their clients can do business with. (because they get paid by one vendor to exclude the others typically). Do you prohibit certain vendors from working with your clients?

    That comment demonstrates either significant naivety or a lack of awareness…. Trent, you should check out deals done (and pending) between VRMA and certain suppliers for exclusive access to data or products offered by VRMA!

    Finally – I have to ask. Given your visible disgust with the ISI distributor charges (10 cents per property per week) – how do you balance that position to your growing relationship with a software company in this industry that charges (I have been told) 50% of the amount the distributor charges? Doesn’t the fact that this ‘other software company’ doubles the distributors’ costs – that “have to be passed back to the PMC” bother you?

  52. Trent
    Trent says:

    Thanks Dave, Glad you had a little fun with Dr. Evil. Yeah, Baby, Yeah.

    It is certainly your right to charge what you want or can charge… and to limit access to whomever you see fit because… it is your business… but the main (self-interested) reason why I support the proposed Vacation Rental Switch is: Blizzard wants access to its client’s data to do whatever the Client wants Blizzard to do.

    Judo Chop!

    Yes, you are right, Blizzard’s customized reservation (BRE) engine ain’t cheap.

    You may use words like “disgust”, “flawed” “motives that are suspect”, “elephant”, “mislead”, “naivety”, “lack of awareness” to describe me but I prefer the immortal words of Austin Powers “Danger is my middle name”

    To set the record straight: Blizzard doesn’t prohibit its clients from working with any vendors, period.

    Blizzard will enjoy working with you one day in the future, hopefully, when you reduce the rules about what Blizzard can(‘t) do. My fondest and most sincere hope is that you will reach out and say “Trent, what policies can I change that would make ISIlink more valuable to you and your clients and the industry.”

    Give it a try, it won’t hurt. It’s Freedom Baby, Yeah!

  53. Trent
    Trent says:

    Thanks Dave, Glad you had a little fun with Dr. Evil. Yeah, Baby, Yeah.

    It is certainly your right to charge what you want or can charge… and to limit access to whomever you see fit because… it is your business… but the main (self-interested) reason why I support the proposed Vacation Rental Switch is: Blizzard wants access to its client’s data to do whatever the Client wants Blizzard to do.

    Judo Chop!

    Yes, you are right, Blizzard’s customized reservation (BRE) engine ain’t cheap.

    You may use words like “disgust”, “flawed” “motives that are suspect”, “elephant”, “mislead”, “naivety”, “lack of awareness” to describe me but I prefer the immortal words of Austin Powers “Danger is my middle name”

    To set the record straight: Blizzard doesn’t prohibit its clients from working with any vendors, period.

    Blizzard will enjoy working with you one day in the future, hopefully, when you reduce the rules about what Blizzard can(‘t) do. My fondest and most sincere hope is that you will reach out and say “Trent, what policies can I change that would make ISIlink more valuable to you and your clients and the industry.”

    Give it a try, it won’t hurt. It’s Freedom Baby, Yeah!

  54. johnnlog
    johnnlog says:

    I was disgusted to see how they were monetizing & restricting the data with distribution “partners” and not disclosing this fact to me. As a potential distribution “partner”, it was simply disheartening, because the money-grab by the software companies made it financially impossible to go through with the project.

  55. johnnlog
    johnnlog says:

    I was disgusted to see how they were monetizing & restricting the data with distribution “partners” and not disclosing this fact to me. As a potential distribution “partner”, it was simply disheartening, because the money-grab by the software companies made it financially impossible to go through with the project.

  56. Ron
    Ron says:

    Been awhile since the last time I have checked this thread, what a pleasant surprise! Enlightening back and forth commentary on a variety of nuanced industry aspects I have often wondered about as a property manager.

    Each installment from most every one that has contributed to this thread so far gives useful perspective which can only strengthen all of us an industry. Thanks for the timely topic and thanks to most of you for all the compelling reading!

  57. Ron
    Ron says:

    Been awhile since the last time I have checked this thread, what a pleasant surprise! Enlightening back and forth commentary on a variety of nuanced industry aspects I have often wondered about as a property manager.

    Each installment from most every one that has contributed to this thread so far gives useful perspective which can only strengthen all of us an industry. Thanks for the timely topic and thanks to most of you for all the compelling reading!

  58. Sojourn
    Sojourn says:

    I enjoying reading this article sounds interesting. Hopefully, VRMA is prepared to chew the rather large bite it’s proposing to take.

  59. Sojourn
    Sojourn says:

    I enjoying reading this article sounds interesting. Hopefully, VRMA is prepared to chew the rather large bite it’s proposing to take.

  60. jordan sneaker
    jordan sneaker says:

    you can manage your rental property and keep track of important information all in one place: The Rental Organizer. Specially designed for the needs of vacation property owners, The Rental Organizer is convenient, easy to use and best of all, portable–so your vacation property management can go wherever you go! soom

  61. jordan sneaker
    jordan sneaker says:

    you can manage your rental property and keep track of important information all in one place: The Rental Organizer. Specially designed for the needs of vacation property owners, The Rental Organizer is convenient, easy to use and best of all, portable–so your vacation property management can go wherever you go! soom

  62. Andy Chapman
    Andy Chapman says:

    We are a new manager and are currently evaluating Property Management Software from a number of companies including Instant Software and Escapia. Marketing our properties on multiple websites is very important to us. At the same time, we don’t want to be called by hundreds of companies because we want to list with them. Instant Software tells us that they do not charge anything for listing the properties. However, as you can see on these blogs, they charge websites a fee to access our properties.

    On the other hand, Escapia is very straightforward in that they pre-negotiate a fee upfront with us and then split it with their partner websites. We do not need to work with each website ourselves, which will save us time and money.

    We do not think that the VRMA switch will address our needs because it is difficult for marketing websites to get access to properties easily. Online Booking also will not be possible because it won’t work with management software. Won’t this result in double bookings?

    Escapia seems like a better bet right now. Does anyone have experience with both? Something I’m missing?

  63. Andy Chapman
    Andy Chapman says:

    We are a new manager and are currently evaluating Property Management Software from a number of companies including Instant Software and Escapia. Marketing our properties on multiple websites is very important to us. At the same time, we don’t want to be called by hundreds of companies because we want to list with them. Instant Software tells us that they do not charge anything for listing the properties. However, as you can see on these blogs, they charge websites a fee to access our properties.

    On the other hand, Escapia is very straightforward in that they pre-negotiate a fee upfront with us and then split it with their partner websites. We do not need to work with each website ourselves, which will save us time and money.

    We do not think that the VRMA switch will address our needs because it is difficult for marketing websites to get access to properties easily. Online Booking also will not be possible because it won’t work with management software. Won’t this result in double bookings?

    Escapia seems like a better bet right now. Does anyone have experience with both? Something I’m missing?

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