Mike Bayer
You're listening to the Vacation Rental Success Podcast. With over 1.5 million downloads, this is the place to be for all your short-term rental knowledge as part of the Vacation Rental Formula Business School.

Mike Bayer
This episode is brought to you by the kind sponsorship of PriceLabs, who will help increase your revenue and occupancy with its dynamic pricing and revenue management tools. PriceLabs has just launched its 2023 breakthrough release of the next generation of revenue management. This brand new cutting edge solution leverages hyperlocal data to optimize rates and increase your revenue like never before. Visit the link in the description of this episode for more information.

Mike Bayer
Without further delay, here's your host, Heather Bayer.

Heather Bayer
In this episode, we're talking about growing a business steadily, and over time, and what it takes to achieve success. I'm joined by Dave Payette of 365Villas in the UK as he shares what he's learned from working alongside multiple property managers as they've enabled scaling as a strategy.

Heather Bayer
This is the Vacation Rental Success Podcast, keeping you up-to-date with news, views, information, and resources on this rapidly changing short-term rental business. I'm your host, Heather Bayer. With 25 years of experience in this industry, I'm making sure you know what's hot, what's not, what's new, and what will help make your business a success.

Heather Bayer
Well, hello and welcome to another episode of The Vacation, Rental Success Podcast. This is your host, Heather Bayer. And as ever, I am super excited to be back with you once again. We talked recently to a few owners and property managers who've grown and scaled their businesses, some at a faster rate than others, but we haven't really addressed the difference between what growth means and what scaling means, because many people use these words interchangeably. That is to mean the same thing, a company getting bigger, gobbling up more market share and making more money, but there is a difference.

Heather Bayer
Let's make this concept a little clearer. Imagine you are a small vacation property owner. Perhaps you've got a charming cabin in a popular tourist area, and this cozy cabin has been your pride and joy and it's your only property. Now, when we talk about growth, we're talking about expansion, the act of increasing the size or capacity of your business. For our cabin owner, it's like buying another cabin in a nearby location. That is growth in action. I did it back in the 1990s and early 2000s, buying property in Ontario. We steadily grew our business by buying more properties. But what about scaling? Well, scaling is a whole different game. It's not just about adding more properties, it's about optimizing your operations to handle that growth without overloading yourself. You do that by putting systems in place that ensure the business continues to run smoothly without incurring too much additional expense or effort. So picture this, you've successfully acquired that second cabin and they're both generating income. To scale your business effectively, you've got to find ways to make it more efficient and more profitable. Think of it as implementing a streamlined booking system, maybe hiring a property management company to handle guest check-ins and cleaning, or leveraging online platforms to reach a broader audience.

Heather Bayer
A simple example might be a website. You wouldn't build a separate website for each property, even though that might signify growth. Rather, you would have both properties listed on one website and as you took on more properties, then you just add them to that website. In essence, scaling means working smarter and not just harder. It's about ensuring that as you grow your business, you're doing so in a really sustainable way.

Heather Bayer
In this episode, I'm talking to Dave Payette, the founder of 365 Villas. He shares valuable insights into how systems and tech can play a really pivotal role in helping short-term rental businesses not only grow, but also scale. So whether you're a novice or an experienced pro, stay tuned. You don't want to miss a second of this conversation.

Heather Bayer
Well, I am super excited to have with me today somebody I've heard about but haven't spoken to before. And this is Dave Payette from 365 Villas, which is located in the UK. But you're not from there, Dave, right?

Dave Payette
That's correct. American-born, born and raised in Ann Arbor, Michigan.

Heather Bayer
That's wonderful. A place I know well. But can I ask you to share your personal journey in the short-term rental business? What were you doing before that? What got you into it? What excites you about it?

Dave Payette
Sure. Well, firstly, Heather, thank you. It's very nice to meet you as well. Your reputation precedes you and it's great to have this chance, so thank you.

Heather Bayer
You're welcome.

Dave Payette
Yes, just a bit about me. My background is rather unconventional in this industry in that I spent probably the first decade or more, a decade and a half of my career working in large organizations providing technology solutions in international markets, predominantly to large enterprise customers, investment banks, and so forth. Somewhere along the way, I bought my own vacation rental on the Kona Coast of Hawaii. That was around 2008, right about the time when the whole financial crisis kicked off. So I immediately had a challenge on my hands in terms of how to monetize this acquisition. And the options available to me on the island at that time in terms of property managers as well as tools in the market, they weren't great. They weren't great. So I took both my hats and put them together and took things into my own hands as it were. And that really is the genesis of 365Villas. And with that one property, if you're approaching it casually, it's fine, just for a bit of extra income. But if you're truly looking to monetize it and maximize what you could do with it, you're going to learn a lot from just one property, and I did.

Dave Payette
And initially, the software development for this business that I run today, 365Villas, it was aimed at that owner market. And we still have owners using our system today, and that's terrific. They're pretty savvy owners because the technology can be a bit of a curve for them. But what we found at the time was the market, in a big way, wasn't really ready for software like that. Owners weren't. But small agents or property managers were. And so we adapted, and many of them found us. And so in a reciprocal way, we really grew through them. We helped them very much from the technology side and every step of the way. Even today, we have this really wonderful feedback loop where they're constantly pushing themselves, trying to drive their businesses and grow. And they give us, more often than not, great advice on the next things that we can do with our software. That's a bit about how I got into this business, the background of 365Villas. And today we support property managers small, medium, and large in over 60 countries around the world. So it's terrific. It's great fun.

Heather Bayer
What inspired me to want to talk to you was that you seem to have this personal connection with your clients. It's not just another property manager or another owner that's signing up. But from what I heard, you have an invested interest in their growth and how they're scaling their businesses. Let's just talk about that experience that they go through as they're growing. And in the introduction, I talked about the difference between growing a business and scaling a business. Can I have your take on that, how you see the difference? And maybe give me an example.

Dave Payette
Yeah, sure. Absolutely. So yes, I'm very much engaged in the business and with our customers, where we can be, very much as a property manager will be engaged in their business and look at service as very important. When you lose touch of that, you really do lose something. So not only do I, as you say, have a vested interest in it, I enjoy it and I learned a lot from it. In terms of the growth journey and technology and property managers looking to scale, yes I think there is certainly a difference between growth and scaling. Growth can come gradually, it can be linear and so forth. To me, scaling represents inflection points, points of potential bandwidth constraints, where there could be operational upheaval and you can be really struggling to maintain quality and service and standards that you want to aspire to and keep providing. So for me, those would be key differences between growth and scaling. And scaling can come in spurts, and leaps and bounds, and quite abruptly, and sometimes even unexpectedly. So you need to be ready for it.

Heather Bayer
I think with the growth in automation over the last couple of years, and I know this from being a 20-year veteran of a property management company myself, that the amount of effort and time that was put into communicating with guests changed dramatically when automated systems came in and we were able to send bulk text messages, and do things in bulk that we always used to do on a very manual and individual basis.

Heather Bayer
But just talking about property managers as they transition from a small to a larger portfolio, and I'm sure over the course of the 12 years that you've been, is it 12 years you've been running the business now? You have seen some of your clients go from being a small company to a much larger one. What have you seen are the key changes that they have to make in their operations and strategies as they make that change over time?

Dave Payette
Yeah, sure. Our user base does tend to grow. They're the tide that lifts us, and we absolutely love that. But I think there's also something important that's often forgotten even before a property manager gets to that point, and that is really preparing for it. It's having clear goals in mind for yourself because every property manager is different in terms of how they want to work, what they're trying to achieve, what markets they operate in, and so forth. So have clear goals, have a fairly detailed plan that outlines how you intend to achieve those goals, and then with those two things in place, measure and monitor your performance on a regular basis, so that you don't get complacent. I think those are really important starting points.

Dave Payette
The market is much savvier now. There's some very impressive people out there. It's very different from five or ten years ago, so most of them know this. But if anyone's listening, your listeners who are relatively new, small, still thinking about that. I think those three things are really important to know what you want to do, have a plan and measure yourself as you go. But when it really gets going, it kicks off and you're approaching those inflection points and so forth, it's crucial.

Dave Payette
And I'm going to sound bias here, but having the right tools and technology in place is absolutely crucial. Otherwise you can find that your time, which is your most valuable commodity, is not being used efficiently and you're going to get bogged down.  And you're really going to struggle to maintain that growth, that opportunity that's in front of you, or as you chase it, you're going to potentially fall down in terms of the quality that you're trying to provide in your service.

Heather Bayer
I really resonate with that. I think when I finished with my company, I realized I'd been a tech-hoarder. When I was clearing out my applications folder, I was like, What was this? And all the things that I bought and downloaded over time. I had a monster tech stack with so many things, because I was great for the bright, shiny things. Bright, shiny, new things, got to have that. Marketing is so clever these days. It gets right in my head and says, buy me, buy me, and I do. So please, all those people who are listening out there and who'd like to sell me something, don't. Don't send it to me because I'm a recoverer of bright, shiny things right now. I'm in recovery.

Dave Payette
Actually, it raises a good point. I don't want to cut ahead here or anything, but you're right. The property managers, they're in a real position to the power of suggestion. Marketing, promoting services and things like that, all this value added wrap around. It's no longer something that's just an extra or something that they have to do. It can really actually be a fundamental engine to driving their growth. It's certainly increasingly where guests are focused. It's not just the property, but the service.

Heather Bayer
Well, absolutely. So, just sticking with the technology and software solutions, and as I said, I was stacking up all these things because they seemed like great and useful things. And there is a real role of technology, as you've just said, in helping to streamline and scale operations effectively. But how do you cut through the noise? I know this. We're heading into this heavy conference season. I know I will go to the VRMA Conference in Orlando in October and be completely overwhelmed with the exhibition hall, the exhibitor hall. Fortunately, this time I don't have a property management company, so I'm not going… Number one, I have no need for many of the solutions now. And secondly, I don't have the finances to get into the majority of them. But how can property managers and anybody going to these things actually filter through what's available and make the choices, make some informed and clever choices?

Dave Payette
Yeah, sure. Great question. One of my favorite, in fact, and you're right, to the uninitiated it can be a jungle out there in terms of all the different options and solutions to choose from. That's certainly true. I think the good news is that as the industry has matured, and I'll be honest, I'll say there are a number of good solutions out there in each solutions area, which is great; didn't necessarily used to be the case. So the question is twofold. One is how do you find quality? Avoid getting trapped and falling for something that is not going to be high-end or what you need. And the other is deciding that it is what you need. So, for example, if you are a relatively small and happy portfolio manager managing five properties and your aspirations are 10 and that's it, fair enough. You might not need the most comprehensive PMS platform out there. But if you are planning to grow beyond 20 or 30, you will need a comprehensive PMS solution. And then once you look at the plethora of PMSs that are out there - 150-200 or more now - many of them are very niche, some of them are embryonic, very new, etc.

Dave Payette
And I'm sure they're doing great things. But the fact is, the first way to whittle it down is to look for a comprehensive solutions provider. If you are planning to grow, you need a comprehensive PMS. From there, there are other things that property managers don't often think about when they're shopping. In the old days, it used to be price, price, price, price. I think the market's matured beyond that. They know that to get good value, you need to pay for it. Nowadays, people are often stuck on features. Features are really important. You need comprehensive features. But there are other things. There's the usability of these systems as they become increasingly broad, wide, and complex. For those of us in the lab, so to speak, supporting those needs while keeping the usability of the system nice and neat is a big challenge, and a lot of systems fall down there. And if you've got to work with the system day-in and day-out, it's your engine, this is something that's going to be really important to you. Otherwise, you're not going to be able to use many of those features.

Dave Payette
Obviously, you want to feel comfortable with the provider.  Are they service-orientated with a complex solution? That's absolutely a must, in my opinion. And then finally, going back to price, look for a cost-benefit equation in the scenario and look for a provider that's going to be able to articulate to you how that technology is not just a cost, but where it's going to save you money and how it's going to help you earn money and grow your business. So I think those are some key tips for shopping around with the provider. But you definitely do want to look around because it's a big thing that most property managers are taking on in terms of the share of their business that it touches. And so it's not easy to change. It is easy to get it wrong and you really want to try to get it right.

Heather Bayer
Yes. I come from a point of experience here. Over the course of our 20 years, we changed systems three times and once was a complete failure. We spent four months in the planning and the execution and then shut it down in three weeks. Well, less than a week actually, after it was launched and went back and then spent another three years back in our original system before we emerged from 'the hole' enough to say, okay, we could try this again. And I'm not sure we even got it right the next time either, but it was a solution that carried us through. And in fact, the relationship was probably the key to that software still being in place in the company. It was a good relationship. So while not everything worked perfectly and it didn't have all the bells and whistles that's promised by some other companies, we were able to use it very effectively. But yes, that transition from one to another, you've got to be so right, so sure that you've chosen the right one before you move forward.

Dave Payette
That's right. It pays to invest some time upfront to go through that process rather than to rush it. And going back to total cost of ownership and cost benefit, as you've outlined, could ask you or any property manager should ask themselves that failure. How much did it cost you in terms of your time? Not just the term the time invested, but the opportunity cost of not getting it right, those initial four months or 12 months and so forth.

Dave Payette
But there's another side to it also, which is, and we see this even today with particularly very large agents who did most of their scaling earlier, maybe have a thousand or more properties, sometimes much more, who have in-house systems that they've built, and those systems serve them well up to a point.  But they're actually not software developers as a business themselves, they're property managers. And those systems are now holding them up, and it's very difficult for them to make the shift.

Dave Payette
Some also have the same problem with property management systems that they've invested in. And what's at work here is a bit of a sunk cost fallacy. It's like, Okay, I've invested a lot in this, it's a big effort to change it. And for that reason, a lot of people don't, but they're actually carrying a huge opportunity cost the longer they drag that on. So yes, part of that growth cycle, and it sounds like you went through it yourself with three changes, is knowing when it's time to change, because my next growth cycle is being restricted by what I'm currently using.

Heather Bayer
We've just started a new series on the podcast that goes out on a Monday called The Tipping Point. The reason that the name came out of that, because we always said we had tipping points along the way. We had tipping points when we got to 15 properties. We had another one when we got to 35, and we had another one when we got to 90. That tipping point at 90, we'd learned a lot from the previous ones. The next tipping point was, I think we're going to sell this business; it's time.  But yes, it's definitely worthwhile understanding when you get to that tipping point, when you realize that something has to change to take you forward.  I think you articulated that really well.

Heather Bayer
Talking about opportunities, leaving opportunities behind because you're hanging on to the old stuff, which is very comfortable, but it's perhaps not working as efficiently as it should.

Heather Bayer
I want to switch over a little bit now and just talk about scaling and challenges maintaining service quality. What do you hear from your clients about growing their portfolios and maintaining the service quality?  And how can they maintain guest satisfaction during that phase?

Dave Payette
Another great question. By the way, as prep for our call today, I did reach out to about half dozen of our property managers around the world, some of the more impressive property managers. And I compiled a composite of their Top 10 List of feedback and recommendations. So don't let me off this call without asking me to recite that list to you at the end, if you like.

Heather Bayer
Oh, I'd love it. Yes.

Dave Payette
Yeah, because that is definitely one of them, I can tell you. But in terms of this particular question, I think if we can parse it a little bit more, certainly there's two things. There's the service provision, and that's down to the employees providing customer service or the business that is providing the actual niche or supplemental service or whatever it is. And that's really down to recruitment and the business relationships that you build. It's down to people. But from the guest perspective, which I think this is where your question is driving, where this question is aiming at, is about the procurement, the purchasing, the procurement of that service. In the old days, I think value-added property managers, they would try to be as humanly engaged as possible.

Dave Payette
But, of course, when we're scaling, it isn't possible to do that all the time. So I think the answer, and there's good news in this by the way, the answer is having the right blend of technology and that human interaction. Technology is never, ever going to replace, I think, the human element. I certainly hope that it doesn't, because we would lose a lot in that. But technology has evolved, the market is much more accepting of it. And what we find is, certainly, I already was observing this and our users reinforced this - there's a lot of change in the market. An example of this is today's market really values immediacy and convenience. And increasingly with each passing year, we have more digital natives coming into our market as guests and customers. So they are far more forgiving and indeed accepting of a technology-based solution that helps them get what they want quickly and conveniently, assuming it's easy, assuming it works. So have those mechanisms in place would be my advice, and ration that human interaction for higher value things. Use it wherever you can by all means, but make sure that it's definitely there for problem resolution or for intricate things that the technology can't quite handle.

Dave Payette
I really think it's the balance between those two. Never let go of the human interaction, use it where you can, but recognize that as you're trying to scale, provided the technology is right, the market is increasingly accepting of such solutions provided it enables them to get what they want quickly and conveniently.

Heather Bayer
I talked to Dale Smith from Host and Stay a couple of weeks ago. And his story of growing from one to 900 properties in five years is quite a spectacular story.....

Dave Payette
.....Extraordinary.

Heather Bayer
Yes. But still maintaining that personal touch on the guest experience and maintaining guest satisfaction. And he's doing it through technology and automations. So that's what scaling is. The growth is going to 900 and the scaling is putting things in place so that the guest that walks into that property feels that they're special, still, even with a larger company.

Dave Payette
Absolutely. If you told me he's not using technology, I would have tried to fathom the enormous cost base associated with that. Yes.

Heather Bayer
Yeah, that was a really good conversation. So this scaling doesn't come without cost, obviously. So can you share some insights into the financial aspects of scaling in this business? What financial strategies are crucial for that success to actually grow the company and scale at the same time?

Dave Payette
Yeah, sure. So again, I think it depends on what you want to do, how far you want to go, and so forth.  I think if you start out as one person, a small property manager, you can probably stretch it to 20, 30 properties. It's really pushing it because I think quality standards will start to fall at that point. But if you want to go much further, obviously technology is not enough. You've got to operationalize your organization. You have to scale it. You have to look at recruiting staff. You have to look at training those staff to make sure that they're customer service oriented and they know their subject matter and so forth. Depending on your market, where you are, it's not always an easy thing to do. I think that's it. That's a key part of it.

Dave Payette
Going back to technology, don't look at it purely as a cost. Look at it in terms of what it can do for you in terms of cost savings and also revenue building, I would say. At the end of the day, really, the financial aspects drive everything, don't they? There will be, maybe there are some who re-enter the industry, they're very rich in capital, maybe they have past successes and a lot of experience, and the normal rules might not apply for a period of time until their budget runs out, or their strategy decides otherwise.

Dave Payette
But for most of us, that financial balance is really important. And talking with some of our users recently, one of them made this very same point. He's doing very well with his services portfolio, but he says, I need to balance my customer service, and my profitability. Another one said, I need to balance my growth and my control. I think ultimately it's about equilibrium across a whole bunch of things, finances included, and knowing when to make the right investments at the right time, whether it's people, whether it's moving to different markets. Because once you've got a pretty good model going and assuming you're focused in a particular segment, which I recommend - that's a great way to grow, by the way - then it's relatively easier for you to transplant that to another market, provided you have the international skills or recruit the local people and so forth. Those are some thoughts on the finances.

Heather Bayer
That's why we called ourselves Vacation Rental Formula, because it all started way back in the 1990s. We bought one property in Canada when we were still living in the UK, and then we bought another one and just modeled it on the successes and the mistakes we'd learned from the first one, and it just became a formula. That formula, you take that formula and you can apply it to the next one and the next one and the next one. And then if you go into a different market, you take the same formula, but you adapt it to that different market.

Dave Payette
Absolutely. Personally, I think that's probably operationally, strategically easier and going to be more effective in terms of cutting through and growing than trying to be all things to everyone with a portfolio that is very broad in a particular market. That's just my personal thought and observation on it.

Heather Bayer
Yes, indeed.

Heather Bayer
I'm going to take a short break just now to hear about our sponsor, PriceLabs, directly from one of their clients. We're going to be right back with more from this great interview in just a few moments.

Lydia
I'm Lydia, and I live in Minnesota, and both me and my husband are pharmacists, and we still work full-time. We have young kids. And how we got interested in the short-term rental business was really just actually wanting a place for ourselves to go vacation. And so we looked at some destinations and some potential areas. PriceLabs' Market Dashboard was actually how we started gauging what area even makes sense. We can see on Zillow how much a house would cost, but how much would that house actually make and does it make sense?

Lydia
On Market Dashboard, it's a very upfront pricing.  I really appreciate that you pay your $10 and you get to see all that data for the month. What it tells you is, in general, what revenue a property would make on an annual basis. I think a lot of times, too, when people are starting to look for a property, they don't even know how many bedrooms or what size house they're aiming for. We had actually some flexibility. Anything above three-bedroom would suit our needs as a vacation home. But as an example, Market Dashboard information told me that there is a huge jump from a three-bedroom house to a four-bedroom house in terms of revenue.

Lydia
A jump so big that is disproportionate to how much the cost of the house would increase if you were to buy a four-bedroom house versus a three. And so information like that helped me narrow down what I should be looking for as I'm purchasing this house. PriceLabs Market Dashboard is really helpful in determining what are the other competitors in the area, how many days they're hosting, what photos they have, what amenities do they offer and really find that match. And from that data, I was able to really narrow down what the projection's like.

Heather Bayer
Thank you so much for that testimonial, Lydia. It was great to hear how PriceLabs Market Dashboard works so practically to help you make an investment choice.

Heather Bayer
Let's talk about marketing.  Elephant in the room, Airbnb versus direct booking. What are your thoughts on that? Where is this going - the whole direct booking movement? I was in there from the very beginning. That's all we did. Back in the 1990s, beginning of the 2000s, we just did direct booking. There was nothing else. And then we went through 2009 to '15/'16. We went through HomeAway. We went through Expedia and then Vrbo and Airbnb and Booking.com growing exponentially into the vacation rental market. It almost seemed like the direct booking movement had dropped right off. And I'm seeing... I said it a couple of years ago at a panel, I said, Are we really investing in the right thing? Are we banging our heads against the wall saying people will direct book when there is this behemoth out there which has gazillions of marketing dollars? But it does seem like…, maybe it's COVID, and I've been talking about trust with Chris Maughan for a bit. We're building a course out on 'Trust in this Industry' and Airbnb goes a long way to try and get people to trust them.

Heather Bayer
But now people are looking towards trust, sustainability, responsible operations. And they seem, the guests that is, they seem to be having a different perspective on it. I'd like your take on that.

Dave Payette
Yeah, sure. Well, there's a lot there, isn't there?

Heather Bayer
There's a lot to unpack in that one!

Dave Payette
Yeah, it's all very interesting, though, and highly relevant. I think you touched on older school - 10-15 years ago and before that - and then when the channels first came out, they were exclusively inquiry based, therefore they were helpful. But still the independent direct booking - I had my own website business - was still very viable and still very prevalent. But then as the channels consolidated and they consolidated quickly, like within the space of five years, we had a dominant four or five emerge. And then after that, Airbnb came. And what are they? The largest? Who knows? But throughout all of that, there was a lot of turbulence, I think, for people who were already in the industry, in terms of the change that that represented. People who were new because people were still... The industry was growing rapidly and people were coming in all the time as newbies. So they thought that that was normal. But for a lot of people, it felt like they were giving up their business independence. It was certainly costing. That they were getting more bookings, sure, maybe, but the profitability was definitely down. There were transaction fees, commissions involved, etc.

Dave Payette
Frankly, those companies, like all big companies - I've worked for many myself - they make mistakes. They make mistakes as they go, and those mistakes can hurt smaller people and smaller companies underneath them. I know that property managers saw a lot of that and as a PMS provider, we saw that as well.

Dave Payette
Now, touch wood, I think a lot of that has subsided. And now that that consolidation has more or less completed itself and the expansion is global, etc, now I think that those OTAs are really finding that, okay, the next stage of their growth and their profitability is to become more customer-centric again, not just for the guests and the travelers, but also for their property owners. Because I'm sure this will resonate with you, but there was property owners and managers. There was a time where many of us felt, Hey, we're not the customer, we're the product here, and we were being commoditized. I think, as you say, that is flipping the other way. And now how I see the market, and this goes back to really how you shop for technology provider. You don't just want a comprehensive PMS. The channel manager is arguably just as important.

Dave Payette
I think you could run a fairly sizable business with the PMS, and workarounds with the rest. I don't think you could do the same in reverse, but they are both important. But that third leg in this is the website, and it's coming back. It's coming back. It is really important, I think, in terms of growth, differentiation, and your own business independence, your control of your domain. And we're very big in this.

Dave Payette
We figured out early on and we've had websites as part of our core offering from about eight years ago. Websites on a standalone basis, they're not that difficult to do unless you are really trying to build something fantastic as an individual agent. As a property manager, you can invest a lot to do a high-end modern website that is integrated or themes and have multiple choices that are integrated with the PMS and the channel manager, that's pretty huge, and I think it's really important. But it's where you can not only do a lot to help your marketing through newsletters and other offers. Grab the contact details for sure. Position your special offers, position your services as you want.  You have all these opportunities with a website that you didn't have before. Plus, you can divert your recurring clientele back to that website.

Dave Payette
Another way to look at it is almost everyone's using various channels. In fact, most are on most of the big ones. If that's your core offering to your owners when you're trying to acquire properties, well, they're going to think they can do that too. It's harder for travelers to really understand when they see like-for-like properties, Okay, what's the difference? A website is a place where you can differentiate yourself. You can invest in search engine optimization, you can get the active social media and blogging. And all this leads to another thing that I got from some of my users, who are very well established in their areas, and some of them are quite high end. And it goes to embracing this concept of destination positioning. So it's not just I'm an agent or a property manager in this locale, and here's a little bit about it. No, it's about taking ownership of why my location is special, why you want to come here. That's something that you're not going to be able to do through a channel.

Dave Payette
But by doing that, not only are you helping with the algorithm and all those things to drive traffic, you're positioning yourself as a voice of authority. And then one last thing is with the 'Book Now', it's really come on. And it used to be clunky, it used to be hard, etc. Frankly, the market wasn't as accepting of it. This may be another thing that the channels help drive. Now I think the market, going back to immediacy and convenience, is very accepting of online booking. So why wouldn't you have, effectively, your own independent channel alongside of your OTA relationships?

Heather Bayer
I love what you said about the destination marketing. So many people are out there, they are the experts. And it's something... It's that one thing that can leverage them away from that reliance on Airbnb, which cannot be an expert in every single market they serve.

Dave Payette
Exactly.

Heather Bayer
I've got one more question for you before I want to move over and hear what your clients have been telling you. In your experience, what unexpected opportunities can arise as property managers scale their business, and how should they be prepared to seize them?

Dave Payette
Yeah, great. Well, we touched on some of them. Some of them are knowing what you want to do and if you want to go to the point where you are actually building a team, operationalizing and so forth, as opposed to being a one man/one woman show. The opportunity when maybe you've maxed-out your segment, your particular area, do you want to go international and so forth? These are all relevant things. But a key thing is being able to be dynamic and adapting to market changes. So that's another point of feedback I got from a number of my users.

Dave Payette
The whole COVID thing, that changed a lot. That put a lot of pressure on people. They had to reinvent themselves. Some are still having to do that. And it's being flexible with the market, the demand. Many are monitoring their pricing daily, even with the help of great tools and revenue management system area, which are also increasingly becoming essential. But people are very much hands-on in terms of what's happening in their market. We're seeing increasing emphasis on data analytics. We are integrated with Key Data, for example, they're one big one that's out there.

Dave Payette
I was in a tool with somebody else the other day. It was called Elevate. I don't know much about it, but it looked really great. So data analytics is big. And as part of that, a trick that people miss, I think, particularly growing property managers, is actively monitor not just the market, but your competitors. Know who they are. Don't be proud. Don't be so proud that you're working in a silo unto yourself. Look around you and see what they're doing, because they're going to get great ideas and you're going to have ideas of your own. So pick the best of both and and have a winning solution. Those would be some thoughts there.

Heather Bayer
That's great. Certainly monitoring competition. The whole realm of networking and how much easier it is to do now makes it a heck of a lot easier. I remember starting out in business and you didn't talk to anybody because nobody wanted to release..... They didn't want you to know their secrets. But of course, there are no secrets.

Dave Payette
Yes, and everybody was quite shy. It's a very nice industry. People don't want to offend each other. Yes, you're right. It was like that. But no more, I think. Yes.

Heather Bayer
Okay, Dave, tell me. You went out to some of your users and what did you ask them?

Dave Payette
Yeah. Well, basically, I asked them similar questions to yours in terms of.... I wanted to know about their growth experience, what were some of the things that they considered essential to the success, things to look out for and so forth. It was hard to whittle it down to 10. I got about 12 recommendations, but I have whittled it down to the 10 recommendations that I heard, I think, most frequently from the six or seven that I spoke to over the last week. Some of them...., I'll quickly, if I may, read them out to you. Many of them we've touched on, but those that we haven't, we can delve into a little bit more if you like. It's entirely up to you.

Dave Payette
So first of all, again, I'm biased, but I was delighted to hear, and it's probably because they already are using a PMS system, but technology was one of the top themes. Absolutely. I heard that over and over. Second, this is part of technology, but I'm separating it out, because it really does come through loud and clear. It's the data analytics that we just spoke about. Third, and this is.... we haven't really touched on in this call, is having your own unique signature or core expertise that stands out, whether it's in service, quality standards, and multiple property managers, particularly in the luxury end, said they're very particular about their portfolio selection.

Dave Payette
In fact, one of them said they refuse four to five properties that they inspect. So it's having your own signature and putting that stamp on what you do and making that identifiable. And again, a website of your own is essential to help that.

Dave Payette
Timely adaptation to changing market circumstances, direct bookings and business independence.

Dave Payette
A big one, I'm cheating, I'm lumping two here together, I think, but is the guest experience and services.

Dave Payette
Number seven, this is one of my favorites, and I'm surprised I haven't gotten to it in this call yet, but it is owner management; it's very important. They are your other customer. And arguably, ultimately, they are THE customer. And with portfolio acquisition, owner management is very important. We can touch on that a bit more if we have time. If not, it's fine.

Dave Payette
Number eight: catering to international needs. And that's not just about opening businesses in different markets. In fact, it doesn't have to be that at all. Going back to destination positioning, I think more often than not, you're going to have not just domestic clientele, you have opportunity for international clientele. Most people do. Technology can now really help you be very multilingual, at least in writing and providing booking information and so forth.  And also it can help you work in multiple currencies if you choose to do. So a number of my property managers pointed that out.

Dave Payette
Here's one which was unique, but it made a lot of sense to me. It was taking a holistic approach to the process... to quite an interesting extreme. So not just the classic reservation management, not just adding the whole part of the property management aspect, that as well, but this team of people, the MD, he tries really hard to have a local team rather than a virtual team. And they even take this holistic approach to the extent of when they have their monthly team meetings, or what have you, if there is a property that's empty, they have it in the property. And he said that really helps with the training, it helps them see the guest experience. And he said from that little change with his properties on Airbnb, for example, in the space of about six months, his typical review went from 4.3 to...., did he say 4.8 or 4.9. But yeah, holistic approach. One user who I highly respect really resoundingly made that point.

Dave Payette
And then finally, for some, if you are looking to be of a certain size and we've touched on it, is that recruiting and training of quality staff and planning for that, because you can't do that quickly, really.

Heather Bayer
That is a great list. That is terrific. Yes, I can see anybody, any property manager who's contemplating any form of significant growth should have this list in front of them.

Dave Payette
Fantastic. I hope it's helpful.

Heather Bayer
You mentioned owner management. I spent 20 years being the owner manager, I guess, in my company. And yes, it's such a good point. Brooke Pfautz and his recent book, Vacation Rental Secrets, which was the 10 mistakes from 50 different property managers. You mentioned that this whole issue about owner management also ties really into that.  What you're saying about having your own signature and your brand, because it's not just about, and to me, it was not just about choosing a property and selecting a property. It was about ensuring that the fit was there between our company and that individual owner as well. So it was a multidimensional transaction to bring on a new property. It's got to be all the standards. It's got to be exceptional, but so has the owner.

Dave Payette
Absolutely. Absolutely. Yes.

Dave Payette
For me, my Hawaii experience, that's what I could not find. It's changed, of course, for all the reasons we're saying. But I couldn't find property managers who were as interested in filling my property as I was, relative to acquiring other properties. Both are really important. One is the key to the other. If you're looking to acquire owners, you need to be in a position to convince them that that is one of the key things that drives you, and to be able to show them that you are really focused on their profitability, their revenue. And to reinforce the point, as we can see it in our system, we have worldwide users and so forth, and we have their owners using owner login, and they use it religiously. They're in it all the time, many of them, some multiple times a day. The interesting thing is to the point where their actually owners are accessing their reports, etc, via their mobile phone. They are really interested. So as a property manager, if you're looking to acquire and acquire requires convincing owners to work with you, you want to be in a position to show them that you provide these tools and that you have their best interest at heart.

Heather Bayer
Yeah, that's a perfect point.

Heather Bayer
Dave, we've come to the end of our time, but I want to give you the opportunity to tell us more about 365 Villas and what the software can do for those who are considering growing their businesses.

Dave Payette
Oh, thank you so much, Heather. Yes, so 365 Villas is a comprehensive property management software platform. As I said, it's serving a worldwide base. And we are an all-in-one provider in that we have the PMS, the channel manager, the websites, and we're integrated with many of the niche providers that property managers might want to use. What we think is special about our platform and our solutions is that not only are they comprehensive and highly functional, we expend just as much effort as we can to keep them simple and usable, nice looking, continually refreshed and so forth, and to enable that scalability. So we've touched on it a lot, this has been key for us, is not just user acquisition, but property manager growth. And I think that's one of the reasons that so many users were very happy to talk to me very quickly. They had good stories to tell. And not every PMS offers that linear or scaled growth. You can hit a wall or a ceiling. Those would be some of our strengths and the platform, probably because of my background and it was made it much harder to build, it doesn't have a local or regional bias.  We had to be international from very early on, and we are.

Heather Bayer
Well, that is great. And there will be a link to 365 Villas on the Show Notes. If you're watching this on YouTube, then you can see that down below in the description.

Heather Bayer
Dave, it's been an absolute pleasure talking to you. I've got quite... I've got to stop myself getting excited about getting back into this business again. I can't do it for a couple of years in Canada because of my contractual arrangements with the new owners of my company. It still comes back to me occasionally and talking to you has given me that little bit of spark of inspiration again. So thank you so much for joining me. It's been such a pleasure talking to you.

Dave Payette
Likewise. It was my absolute pleasure to finally meet you. And I'm grateful for your time. And yes, after your embargo is over, it is still a very exciting, fun industry to be in. And I'm sure there's a lot more excitement ahead for all of us.

Heather Bayer
Well, thank you, Dave. That was a great conversation on growth and really interested in the list of items that Dave had sourced from many of his users that we just included towards the end there. And just interesting to see that all these users are still talking about direct booking as being a big part of their portfolio, of their strategy. And I'm glad it hasn't got away because that is a lot of what we're doing at Vacation Rental Formula, is to be bringing you educational material on how to do the direct booking side of it, how to do this growth in a small and growing property management company. So if anybody is listening and wants more information on these whole issues of growth and scaling, let me know. I'm always interested in what inspires you. So if you felt some inspiration in there, you need some more information, let us know and we'll go out and look for it. And if we can't find it, we will aim to create it.

Heather Bayer
So on that note, if you've not yet listened to 'The Tipping Point', don't forget that that is our extra episode a week that now goes out on a Monday. It's around 10 minutes and it's a teaching.... it's a lesson basically in a specific topic. And we're producing these in conjunction, over time, with some real experts in this industry. So while at the moment the episodes have been me, as we go forward, we are going to be introducing you to some other experts, some of whom have been on the podcast before, some who haven't, but we're asking them to give a 10-minute masterclass on a particular topic.

Heather Bayer
We're really excited about moving forward with this. We'd love you to go and check these out on YouTube or on our YouTube channel, because you get to see the graphics and the slides that people are bringing along as well. Please go to the YouTube channel, subscribe, and we will let you know each time a new Tipping Point episode is broadcast. Of course, you'll find it on the podcast as well. So if that's what you prefer to do, you can, of course, just subscribe to the podcast and you will be notified every time a new episode comes up. We love it that you are listening to us. We love it that you're enjoying the Tipping Point as well.  We're hearing from a lot of people who have found it already of really good value. That is lovely, always when our efforts are recognized.

Heather Bayer
That's it for another week. As ever, it's always a privilege to be in your ear wherever you are, whether you're out with the dog or doing the laundry or doing a changeover. I hope that these episodes are seeing you through all your tasks of the day. And of course, you can expect a lot more of this to come.

Mike Bayer
We hope you enjoyed this episode of the Vacation Rental Success Podcast. Don't forget to check out our sponsor, PriceLabs, and their dynamic pricing and revenue management tools. Click the link in the description of this episode for more information.

Heather Bayer
It's been a pleasure to be able to be with you. If there's anything you'd like to comment on, then join the conversation on the Show Notes for the episode at vacationrentalformula.com. We'd love to hear from you and I look forward to being with you again next week.

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