How to future proof your vacation rentals
In this episode of How We Grow: The Vacation Rental Show, host Lynell Gordon interviews Simon Lehmann, Co-Founder and CEO of AJL Atelier. Join them as they explain how to future proof your vacation rentals. They cover why profitability is so vital to a company’s survival, the reasoning behind widely spreading your distribution channels, and reflect on some of the toughest times in the industry.
Simon Lehmann is the Co-Founder and CEO of AJL Atelier, a boutique consultancy that specializes in the international private accommodation and vacation rental industry. He helps firms buy, sell, and get funding to grow their businesses. He is also an Advisor at Central and a Board Member of several companies including Breezeway and Viselio.
Overcoming Tough Times in the Vacation Rental Industry
It’s very easy to get caught up in the hype and positivity of your work, especially now that the pandemic has passed. We’ve had to adjust to not wearing masks, shaking hands and hugging others, and rebuilding our finances.
Simon believes that while it is exciting that we’re getting back to normal, us in the vacation rental industry need to ensure that we are also better prepared for next time. When our entire business relies on people traveling, we can’t afford getting stuck in such a precarious situation again.
This applies to a post-pandemic economy, not just business hardship during ‘unprecedented times’. When business naturally slows down, we have to find innovative ways to get people back in vacation rental properties. “We always say that we can survive crises very well, that we’re very flexible,” says Simon. “So when the month gets slower, well then good luck to you, because ADRs will drop, occupancy will drop… it’s going to be a mess! So I think we need to be very mindful.’
And of course, he’s right. We can’t afford to be in yet another position where we’re financially flailing. Make sure you have contingencies in place, plan for future problems proactively (not reactively), but most importantly: make use of distribution channels.
Utilizing Distribution Channels
“I think what you need to look at in distribution is that you have a well-balanced channel approach, and not have too many eggs in one single basket,” explains Simon when asked how us vacation rental folk can utilize our distribution channels more effectively. “Have your eggs spread in as many baskets as you possibly can to leverage the different channels that you have available to you.”
He further goes on to explain how differently Europe and the U.S. use distribution channels.
“There’s a big differentiation between Europe and the United States. In Europe, it’s far more common to distribute across a lot more different channels than it is in the U.S. In the U.S, you have two very strong, predominant channels, whereas in Europe you have many others,” Simon elaborates.
When it comes to choosing which distribution channels to promote our rentals on, take a leaf out of Europe’s book and don’t rely on the two biggest ones.
Instead, we should start thinking about spreading properties across many different channels. This helps future proof properties in our industry, as well as guaranteeing increased visibility. It’s our reliance on these couple of channels that could be our downfall. If everyone is advertising on them, then it will become oversaturated with competition. You could be just one of the many drowning in the depth of the distribution channel’s algorithm.