Trust Accounting Isn’t Back Office: It’s the Foundation, with Ed Ulmer of Barefoot

In this episode, we are joined by Ed Ulmer, CEO of Barefoot, for a conversation about trust accounting, vacation rental technology, and what operators need from their systems as their businesses become more complex. 

Ed shares how his background in tourism, destination marketing, real estate, and software all shaped the way he looks at vacation rental management today. For him, the industry has always come back to one core idea: trust. 

The conversation takes a deep dive into why trust accounting should not be treated as a back-office function. When vacation rental companies manage properties on behalf of owners, they are also managing funds, contracts, obligations, and expectations. As companies grow, that complexity only increases. 

Episode Chapters:

03:18 - Ed’s path from tourism, real estate, and software into vacation rental technology

11:56 - Why vacation rental management is built on trust

17:37 - What trust accounting really means for property managers

25:24 - Why managing owner and guest funds gets more complex as companies grow

27:27 - How state regulations and real estate requirements impact vacation rental operators

30:10 - Why loyalty programs are harder to build in vacation rentals than in hotels

33:48 - How PMS technology can support concierge services, rewards, and guest retention

39:17 - What operators should consider when choosing a PMS

47:55 - How AI and natural language search may change the booking experience

For operators evaluating their technology, this episode offers a practical look at why the systems behind the business matter just as much as the guest-facing experience. 

Connect with Ed & Barefoot:

LinkedIn: https://www.linkedin.com/in/ed-ulmer-150596/ 

Website: https://www.barefoot.com/ 

Facebook: https://www.facebook.com/mybarefoot 

✨ Exclusive Offer to Alex & Annie Listeners: 

Manage your vacation rental business with more control and confidence using Barefoot. Alex & Annie listeners get 10% off monthly fees through 2026.

👉 Get started: https://www.barefoot.com/alex-and-annie 

Thinking about the next chapter for your vacation rental business? 

Connect with Monarch Collective to explore what growth could look like with the right platform behind you.

👉 Learn more: https://gomonarch.com/partnerships/ 

Reach more guests across top travel sites with BookingPal.

Alex & Annie listeners get onboarding fees waived + 20% off the first two months.

👉 Get started: https://alex-and-annie-offer.bookingpal.com/ 

#vacationrentals #shorttermrentals #trustaccounting

Transcript

Alex Husner 0:01

Welcome to Alex DeManning, the real women of vacation rebel. With more than 35 years combined industry experience, Alex Teamster and Annie Holcomb has two doubt to connect the gaps between inspiration and opportunity. Seeking to find the one story, idea, strategy, or decision that you'd like to progress based on the moment. Join them as they highlight the real stories behind the people and brands that have built vacation rebels into the $100 billion industry it is today. And now it's time to get real and have some fun with your host, Alice and Annie. We'll start the show in just a minute. But first, a word from our premier brand sponsor.

SPEAKER_01 0:41

My name is Elena Jones. I am the owner, along with my husband Wally, of Pottery Getaways. We are a vacation rental management company and a full real estate brokerage here on South Pottery Island, and we are starting

Sponsor Spotlight: Barefoot

SPEAKER_01 0:54

our seventh year as a client of Barefoot. When we went looking for a new property management system, we realized that it came down to about three things. Trust accounting was not optional for us. It needed to be the foundation of our property management system, not something that was holding on to that foundation. It had to be so much more than a reservation system. We needed a system that could support our business. We also knew that we would never be anybody's biggest client. And so it was very important to us that we not feel like a small fish in a big pond. Barefoot checked all the boxes for us then and it still does today. Barefoot supports the way that our company operates from start to finish. They help us stay organized behind the scenes so that our team can do what they do best, which is hospitality. We pride ourselves in trying to provide an excellent service for the guest, and Barefoot allows us to do that. We outgrew our original property management system and we don't expect that that will ever happen with Barefoot. I think one of the huge competitive edges that they have today in today's market is that they listen to their clients and that their development priorities are being set by their clients and not by their investors. The relationship that we have with the team at Barefoot is very personal. We know the people behind the software. The people that were there when we implemented, the people that sold us the software, our client success managers are all still there. And so we don't have to re-educate them over and over again about our business. They know it, they know us. As someone once said, the vacation rental management segment, we are the people who hug at conferences, and Barefoot lives up to that. With Barefoot, we know we are important. I would absolutely recommend Barefoot to others, and I have recommended Barefoot to others. Why we stay with Barefoot so long is that we need software and people that we trust, and we trust Barefoot.

SPEAKER_05 2:45

Manage your vacation rental business with more control and confidence using Barefoot. Alex and Annie listeners get 10% off monthly fees through 2026. Click the link in the description to get started.

Alex Husner 2:57

Welcome to Alex Danny, the Rillawoman of Vacation Rentals. I'm Alex and I'm Annie. And we are joined today by Ed Ulmer, who is the CEO of Barefoot. Ed, it's so good to finally have you on the show.

SPEAKER_03 3:09

Thank you for having me. And look forward to this for a long time. You guys are remarkable, and hopefully I can add a little to your talk.

Annie Holcombe 3:17

Oh

Ed’s path from tourism, real estate, and software into vacation rental technology

Annie Holcombe 3:18

my gosh. I think we have all agreed we needed to have like three hours with Ed because there's just so much to glean from you. But before we get started, I I again I say this with a lot of our guests. A lot of people know Ed, but I don't think a lot of people know Ed. So why don't you tell us a little bit about your background? Because you've done some things previous to Barefoot that a lot of people might not know about.

SPEAKER_03 3:37

Yeah, uh it's it's interesting because Barefoot is definitely kind of where I've come uh come to, but I was very involved in a number of unrelated businesses that seem to just end up in Barefoot. Um I got out of college, went to Japan for a year. I know this does this goes way back, but I've always been fascinated with Asian culture, especially Japan, the whole concept of loyalty, working together, listening to your peers, and respecting those above you. I came back, worked for a software company, was uh a CAD software company in the AEC industry, architectural engineering construction companies. We sold our software through a VAR network, which is a value-added reseller. And so I had to spend most of my time understanding what the VARs are, what their needs were. And they were consultants and they would sell our product to very specialized industry, and they needed to know and talk that industry. About that same time, I connected with a guy named Tom Murphy. Tom Murphy was the um guy who created the Stowe Area Association. And if you're from New England, you're very familiar with Stowe. At one point, hard to believe, it was a sleepy ski town. And Tom came in and created the Stowe Area Association and is probably the most important person to turn that town into an international destination, a four-season resort, and so on. And so he was getting out of that uh space, and uh Bar Harbor Maine called him and said, Hey, uh we said, love what you did in Stowe. We'd love for you to come and work with us up here. And Tom was like, I'd love to, but I'm not moving up there. I look Stow. And I had done a couple projects with Tom. We had really connected, and Tom said, Hey, I've got a young buck who is willing to come up there, be my eyes, my ears, my hands, uh, you know, everything. Um, and uh we'll see what we can do. And uh, it's interesting because the local businesses were so frustrated with the Chamber of Commerce that they basically said, we're done. Uh, we no longer want to work with you, we're gonna start our own organization. And Tom was the core of that. And so I learned from a remarkable individual. I am a true believer in mentorship. I've had so many of them. And that the that older age has just given me so many pieces of wisdom that in some cases I was like, huh, I'm an old soul too, just because I've been able to learn uh some really remarkable things from people that have been tremendous at what they do. And in Bar Harbor, we did tremendous things. Um, we did uh co-op advertising and packaging. Bar if you've never been to Acadia, it's a long trip. Most people would fly into Boston and do the five hours to get up there. And so most people would actually take a slow trip up there. Uh-huh. And they'd get there on the fourth or fifth day and go, geez, I wish I had been here longer. So we really started to understand what we needed to do to change things, understood the concept of bitch. We did the same thing in Plymouth, Massachusetts. We, I think Massachusetts still has the only town-wide packaging program. About that same time, I did a number of other small businesses that set up a dock boat business, which was really a heck of a lot of fun. I taught tourism at a it was really, really fun. I actually set up an entertainment book. And if you're my age, you probably have heard of the entertainment book. You guys would not have heard of it. It was a silver book that it was a buy one, get one book that nonprofits would use to sell, and you just use it to get um coupons and stuff like that. It's pretty remarkable. And then I worked for a large mall company, and that's how I got introduced to leasing and real estate, and so I got my real estate license. I actually have it in New Hampshire and Vermont, excuse me, New Hampshire and Massachusetts, and I sit on the MLS board to this day for Prime MLS, which is interesting because I think it's the only MLS that actually represents two different states, New Hampshire and Vermont. And Vermont is one of the most liberal states in the country, and New Hampshire is the live free or die state. So it's really fun and interesting and such a wonderful treat when two different groups that kind of come from different places actually work well together. And it's because of expectation and respect and kind of all of that stuff that was unrelated that took me to barefoot, which is kind of the way I see things. So it's kind of my background. Unrelated related.

Alex Husner 8:03

Yeah, no, it is though. I mean, really, when you look at your history, and we talk about this in the show all the time of like, you know, connecting the dots. And in those moments and those different career stops that you had, you didn't know where you were going to end up at the end. But now looking back, it's like, okay, yep, that that clicks. That all makes sense of why you had the experience to get to where you are and to grow the business to where you are. Um and one, you know, funny side note too. I bet back in the day that you and my dad probably crossed paths. I know I've told you I'm from New Hampshire, but he was very involved in tourism throughout New England and had an advertising agency and did pretty sure they worked with Stowe, but um for sure Bar Harbor also. So I'm gonna ask my dad if he remembers your name, but it's likely you guys remember a chamber meeting or a tourism board meeting at some point.

SPEAKER_03 8:51

It was an incredibly uh small world. It really is fascinating. So I've there's a good chance.

Alex Husner 8:57

Yeah. Well, and and on that though, I'm I'm curious like, what was it that you learned from working with the tourism boards or the different associations that have has kind of like helped you shape how you look at vacation rentals these days?

SPEAKER_03 9:13

Yeah, I mean, again, the tourism organizations were uh startups because the the the real company, the real the Chamber of Commerce, who actually should have been doing this, just wasn't paying attention. They weren't listening. And so from my perspective, it's very important to listen. It's very important to ask questions, it's really important to set expectation and meet in and exceed it. And I think that's one of the things that uh Barefoot does a really good job of. And I know my staff is remarkable at that. So they all really care. They're they come from this industry. On average, our staff members got over 10 years of experience just with Barefoot, and they they live in the destinations where I found them. So, and it's actually interesting, the small world scenario. Um, Alex, you're from the Myrtle Beach area, right? I I live here now.

Alex Husner 10:06

It was from New Hampshire back in those days, yeah.

SPEAKER_03 10:09

Well, have you heard of Woody's? Woody's, no. What is that? It's one town down, and it is the it's an activities business. They do all kinds of activity stuff. So interesting. Sean Woody came to us in 2015. He had was working for another software system. He came to us and said, I'd really like to work with you. And we snatched him up because a really smart person. You guys know Claiborne as well. Claiborne came from a web company that was um promoting HubSpot, way before HubSpot was what it is now. And we snapped her up because it's really tough finding remarkable people. People that are consultative, that understand the industry, but are also willing to listen and be creative, which is, I think, one of the great things about uh our business and uh what I really enjoy doing and uh conspiring with my staff on.

Annie Holcombe 11:04

I love that. And um, I personally have had a lot of touch points with Barefoot and your team over the years. And one of the things that I've found is that if somebody comes to work with you and they don't know much about Barefoot within a very short order of onboarding and working with your team, I mean, they have drank the Kool-Aid, they are all in, they are Barefoot devoted. Um, and I think that that's something that some technology companies struggle with is that service component. I mean, they might have like the flashiest interface or the newest tool and you know, great marketing, but sometimes they just miss the mark on sort of that that customer connection. And I think that you guys do that incredibly well, and I would say better than almost anybody that I I've ever worked with. And I'm curious, um, is that something when you started with Barefoot that was like a focus, or is it just something that organically happened with the people that you brought to the organization?

Why vacation rental management is built on trust

SPEAKER_03 11:56

Well, I would love to say that I'm that remarkably organized and so on. So I think it's a kind of dame, but it's pretty straightforward because if you look at your clients, I mean, all of our clients don't manufacture anything, they put people together. They are people, people. So if you're not, if you're not relatable, if you're not listening to them, you're you'll fail eventually because this is an industry of relationships. It is an industry of trust. We do not manufacture anything, we manufacture trust. And so it's important for my staff to trust me, to trust the company, and to trust their the clients and so on, and vice versa.

Alex Husner 12:36

So it's interesting that you use that word trust, Ed, and we're gonna get to something that's very important as far as you know what Barefoot offers, which is your trust accounting, that I think you know the industry recognizes that you guys are kind of the OGs in that. But before we do that, I wanted to ask one other question, just kind of from your high-level view, since you've seen so much in this. What do you think is the biggest change that has happened in vacation rentals since when you first started with Barefoot to now? If you had to pick one thing?

SPEAKER_03 13:04

That's a great question, a tough one, because there's so many things that have changed, but most of it has been subtle because the the nature of vacation rentals really is not changed. The core of it, which is you're providing a remarkable experience uh for guests, um, and you're providing a revenue source for owners. But I would say the biggest things, and again, it sort of depends upon the time frame, is the speed in which things are occurring, which goes to AI as well. So how fast um reservations occur, how um phase have gotten shorter, the management of additional services become more popular. It's just things are just moving much faster. But I think that's uh the nature of the current world as well. So I don't think I have anything epic to say there. Sorry.

Alex Husner 13:58

Yeah, it's it's like it's nothing and everything at the same time. Yeah, right. All of the above change. Yeah, I know that that's that's a that's a hard question to ask. But I I do remember on our we chatted last week and you know, we started going into the different areas besides just short-term rentals that that barefoot can service and how you know one of the things that has changed, but I don't know that you guys had predicted this way back then, was just more, you know, there are a lot of investors that are looking at these properties as assets, right? And you know, what people need to be looking at from a uh software side, if you are a company that manages homeowners that are in that perspective. And you guys actually had that foresight to have it set up so that those homeowners now are actually in a really good position, which is great.

SPEAKER_03 14:43

When we started building our first system, we immediately realized that we weren't really building to the vacation rental space. We are a high asset turnover system, which basically meant look, we can turn over, we can manage any type of thing that gets uh the where there's a stay overnight. And of course, when you have a stay overnight and there's multiple people and there's a contract, you have to follow West Girl County. So that's where we started. Um, our first version, actually our second version of it. And then as time went by, we started to realize okay, where are all of these things? It's not just short-term rentals, midterm rentals. There's, you know, uh interesting capability out there. And actually, 85% of our clients do some form of midterm rentals. We did over 18,000 leases last year that were midterm rentals. We have some clients that do long-term rentals, a little bit of corporate housing. We did corporate more corporate pre-COVID. And unfortunately, that industry tends to go up and down based off of corporate travel, obviously. Resort capability, um, even a little bit of timeshare. Um, all of those kind of play into that space, but then there's much more involved than just that, because all of those have their own unique parts to them, number one. And number two, they also compete with other things. You'll notice that pretty much everything I said there was lodging based. And so if you were to ask, you know, in the entire industry, you know, kind of what has changed, I would say that um the lodging industry is great. Hotels are now doing vacation rentals, campgrounds are actually even conduitized in some ways. The whole concept of lodging is is evolving. And we were just lucky uh enough to look at all of these, what we considered competitive but not really competitive, unrelated kind of um lodging, and see what we could learn from each one of them and apply them into our system. And it's interesting because when we built our system out as a high turnover asset product, we built it like all software companies do. You've set up you have a set of parameters. And then we really early realized, oh, I think we missed something. And so instead of bolting something on, trying to hide what we did wrong, we actually went back and tried to rebuild that piece so that it can become, you know, uh more of a foundation for the next version of the software and so on. And it's fascinating because there's so much you can learn from, you know, we've got three industries that we really kind of pay attention to. So real estate, hospitality, and asset management. Um, and we've learned so much and we've been able to build a tremendous amount of capability that all goes back to the our escrow accounting system. So, you know, it's fascinating.

What trust accounting really means for property managers

Annie Holcombe 17:37

I feel like you you go to conferences and there's you know a new PMS, or you know, and and the one question I always ask people is, do you have trust accounting? And and people will say various, well, we're gonna get it, or we're gonna have it, or do we need it? And I'm always baffled. You know, I'm always baffled by that in the US, but you know, it's I guess the thing is it's not mandated everywhere. I think like Australia News News, like some areas of Australia, New Zealand, and in certain states in the US, but there's like not a lot of places that actually like say you have to have it. It's just you should have it. I mean, that's like the red the you should you should operate that way. Um, what do you think from you know your learnings, I guess, over time, because you guys have kind of built the system around that trust component, that accounting component. What do you think that others, I mean, maybe getting into this space are overlooking, or are they just making an assumption that they can get by without doing this?

SPEAKER_03 18:30

Right. Yeah, yeah, it's that's a really great question. So, first of all, when you're young and small or small, you can get by. If number one, if you're managing your own property, you don't need escrow or trust accounting. Um, but when you start managing other people's properties, then you do 73% of states in the United States require you, if you're going to manage somebody else's property, to follow real estate law. And in many cases, it means you're either getting a property management license or a real estate license. Each state has a real estate commission, and the real estate commission's job is to make sure licensing is done right. And if there are any issues, that they will go and do an audit. And so when you're dealing with escrow accounting, and escrow accounting is not general ledger accounting, it is not QuickBooks, it is not um, you know, any of these other accounting systems that you businesses typically use. Escrow accounting, and I think the definition is actually I've got it written right here, the concept of third parties holding funds for others until contractual obligations are met. In other words, it's a complicated transaction with multiple people and money involved over a certain amount of time. And in theory, uh it's actually relatively simple because there's four major components to it. One is accuracy. There is no profit in trust escrow accounting. It's contractual. I'm going to pay you this for this. It's a real estate transaction, but it it needs to be 100% accurate. You cannot hide in a in a trust or escrow accounting component. Number two is segmentation. It cannot be associated with your general ledger. You cannot use that money for anything until the contract has been completed or whatever part of that contract is. Third thing is reconciliation. So when you would actually send the money out, you want to make sure that you're sending the money out and it is 100% accurate. And every party, at least from a financial perspective, goes away positively. Because if you go away negatively, what's going to end up happening is the real estate commission's got to get a complaint. And at least in New Hampshire, I'm not sure of all states, but in New Hampshire, they are obligated then to go and start an audit. And audits typically start very simple, but audits can get blown out of proportion quickly. I've seen people that uh it started as a simple issue and they weren't fast enough, and all of a sudden they were getting audited for the taxes to the state. And then all of a sudden they were getting audited because of their hiring practices. So these things can be crazy. I've heard of people that have gone to jail for not managing their trust account properly. And you know, many people that have lost their license and their way of life because they are not paying attention to this. And it gets more and more complex as you get bigger. Not only the liability, but also you got lots of moving and working parts. It's it's a really complicated thing. And it's funny, and I like stories and I like history. So give me one second to kind of say this one is really kind of cool. There's a guy named George Parker in the turn of the century. Look him up. Um, he was an immigrant in New York City and he sold the Brooklyn Bridge to many people. It's where the phrase, if you believe that, I can sell you a bridge comes from. Okay. And Grant's tomb. Oh gosh. The turn of the century. Most people that were in the real estate business. Nobody trusted them. They were like uh used car salesmen, like you know, well, but there were no used cars back then. But you get my point that there were no trust whatsoever. So a bunch of uh honest real estate um people got together and said, we've got to do something about it. In 1908, NAR was formed to lobby the government to actually start to manage and monitor uh all real estate transactions. And so that's the start of NAR. In 1913, they came up with a code of ethics. They followed this was a model that was started by the medical profession in the early 1800s, the legal profession and the engineering profession, because all of these guys, there was lots of fraud that was going on out there. And so uh it's escrow accounting that we do, but this is where trust came in, because if you don't trust the people that you're working with, then you've gotten done. And so escrow trust accounting, the trust comes from kind of that scenario. But it's that's why the real estate commissions are so vicious when it comes to these things because they know what things have come from.

Alex Husner 23:06

We'll be back in just a minute. But first, a word from our premier brand sponsor. If you own a vacation rental management company, this one is for you. A lot of owners have thought about selling someday. Maybe not today, maybe not even this year, but eventually. And when that thought comes up, two questions usually stop

Sponsor Spotlight: Monarch Collective

Alex Husner 23:22

people in their tracks. What is my business actually worth? And what happens to the people, the homeowners, the reputation, and the brand that I spent years building? That's exactly why we want you to know about Monarch Collective. Monarch is built for local vacational brands that want to grow without losing what made them special in the first place. When Monarch comes into a new market, the local brand stays. And not just the name on the website, the team stays, the homeowner relationships stay, the reputation you earned in your own backyard stays. But now there's a much bigger platform behind it. You get paid for what you've built and the parts of the business that drains so many owners. Finance, accounting, HR, legal, backend operations, they come off your plate. And instead of doing everything alone, you get the support and horsepower to keep growing. You can keep running the business as long as you want. You can step back when you're ready. There's not one version of what this has to look like. And here's the best part you don't have to be ready to sell to have the conversation. Even if you're just curious, Monarch will sit down with you, free and no strings attached, to help you understand what your business could be worth. No pressure to sell, no pressure to sell to them. Just a real conversation with people who understand this industry and respect what local operators have built. So if you've ever wondered what your company could be worth, go find out. Visit gomonarch.com slash partnerships. I remember my early years in vacation rentals here in the Myrtle Beach market, there was a large operator that basically overnight, you know, went belly up that they sent an email or and a letter out to their homeowners saying, we're, you know, we're we're going out of business and there was no there was no money left. I mean, and you know, everybody hopes that you know you don't have a property with a manager that that would ever happen. But, you know, regardless of whether your state mandates it or not, it is good business practice to still, you know, have your have your company set up that way to prevent you know anything going wrong. But my my question would be, Ed, why is it, because what you just described sounds perfectly, you know, reasonable. Why is trust accounting so hard to build for these software companies?

Why managing owner and guest funds gets more complex as companies grow

SPEAKER_03 25:24

Another great question. You guys are full of great questions. Trust accounting, in its simplest practice, is actually relatively simple because you have no profit, you can't write things off. It is this money is is due on this time by this person, and then it's due out on this side of things. So if the contract and the process goes as it's supposed to go, in theory, it's not that complicated. Now, when you start dealing with midterm rentals, there's some variations there. When you start dealing with, you know, some of the other aspects of different types of rentals, it gets starts to get complicated. But where it also gets complicated is because every state sort of does escrow accounting, trust accounting a little different. It's run by the states for a reason because everybody does it differently. North Carolina, in you know, you can pay the owners as money comes in. And New Hampshire, you never do that. Because what happens if there's so that's number one. Number two is what happens if there's a cancellation in North Carolina? How do you get the money back from the owner? And especially if the owner's already spent it.

Alex Husner 26:27

Yeah, yeah, that sounds like a nightmare.

SPEAKER_03 26:30

So managing when things go sideways is where it really starts to get complicated. Number one. And number two is if you look at the average transaction, when we go on vacation, Annie, you were just in Europe. I have no doubt that wherever you stayed, you know, you did a lot of things, and that that lodging probably helped you with a bunch of it. So there's, you know, linen fees, and maybe you did a restaurant and you charged back to the room and all of those things. So those are all little mini contracts there. And trying to get all of them to work properly and make sure that they're paid out properly so that you don't get a complaint, which causes the audit, is the complicated part of all of it. So and and the reality is it takes millions of transactions, billions of dollars, and a whole lot of years. Because just when you think you get it right, somebody comes with you, you know, comes at you with a doozy.

How state regulations and real estate requirements impact vacation rental operators

Annie Holcombe 27:28

So I'm gonna come with a doozy then. Um, this is I think this is like tangential to like what we're talking about. But why do you think, because of these things being regulated or mandated or run or you know, uh however you want to say it, the real estate you know, groups have a lot of say in this. But why do you think that there's so much friction between the short-term rental industry and the realtors? And I say that um Tennessee is a great example. They were just trying to pass a pass a law that would require property managers to have a broker on site, but not an individual host. It was, it was the companies. And so that was an expense that some of these companies they never had, but all of a sudden they were gonna have, if they had to do it, they were gonna have to let go of a staff member to allocate for that. They were gonna have to have an office that maybe they didn't have or a larger office. And and and, you know, so it kind of felt like in some ways that the real estate people were trying to cut their way into the business. I think the truth lies somewhere in between always with these things. Florida has some, you know, prickly things, Alabama, North Carolina. I mean, but what do you think there is that friction? Is it just the lack of understanding about the way the business is run or the assumption of maybe, again, one entity trying to mandate something over to another?

SPEAKER_03 28:48

I I think a lot of it is the mandate over one thing over another. Real estate agents, you know, they're all independent business owners. They're trying to trying to stay in business. And the last couple of years, it's it's been up and down, um, you know, kind of all over the place. Um, they also, you know, most states require you to have a real estate license, and the real estate agents truly uh understand the importance of that. It's what makes them unique and different. So somebody being able to skirt that uh doesn't take they don't take kindly. It's actually a little like the hotel industry. The hotel industry has lobbied for years against vacation rentals. Yeah. Until I all of a sudden went, huh, maybe we should actually do some of it. Be in it, right. Against it as well, you know. So I think it's it's um a little bit of um uh wanting to be, you know, engaged in things uh and so on. It's funny because in Ocean City, Maryland, there's a noise ordinance, and what part of the noise ordinance is that you need to show up within 24 hours to deal with that noise ordinance. And if a homeowner lives 100 miles away and they get that noise ordinance, uh fine, what are they gonna do? So they kind of have to have a property manager or rental agency, you know, helping them. And so the real estate groups are applauding that.

Why loyalty programs are harder to build in vacation rentals than in hotels

Alex Husner 30:10

Yeah, that makes a lot of sense. A lot of sense. Good quote, good, good doozy, Annie. That's a good one. Um, yeah, and and and I want to kind of go down this route a little bit because we've said this on the show many times that we talk about, you know, there's not been a true loyalty program in vacation rentals or one that's you know widely adopted from the property management systems that would need to be kind of the backbone of it. And uh when we were chatting last week, you were telling me about the rewards program that Barefoot does offer to clients, and I hadn't heard of it before. But I mean, it sounds like from what you've described, you're able to offer that as an option because of how the foundation was built. So maybe tell us a little bit about how the rewards works in relation to this conversation.

SPEAKER_03 30:55

Yeah, and can I I'm gonna start off by giving you another history story. Okay. History with Ed.

Annie Holcombe 31:02

I love it. Yeah.

SPEAKER_03 31:03

In the late 90s, um, hotels and airlines were doing well, minus maybe the gas crisis that was going on at that time. And uh they did a lot of business with travel agents, and travel agents would give them their their 10%, excuse me, the hotels and the uh airlines would give them the 10%. And along came a small company called uh Expedia. And they said, We're a travel agent too, we're just a little different. We are using this new thing called the web. Fast forward a couple of years, and all of a sudden they were the travel agency. And fast forward another couple of days, and they said, you know what? We're not happy with our 10%. We're gonna take 20% now. And they were they were given an ultimatum, the hotels, the airlines, and stuff like that. So most of them just kind of stocked it up and took the 20%. But a number of them said, you know what, we're gonna go and do our own thing. What they had realized at that moment is they had lost concept of brand. They no longer had their brand. And yin and yang. So whenever there's a push, people push in it maybe in a different direction. So what ended up happening, especially with the hotel side of things, is they came up with hotel uh yield management tools, not dynamic pricing, that's just one piece of it, but hotel yield management tools that has actually made allowed them to get their brand back, but it's been a long, arduous crawl uh towards it. And we paid attention to this right from the beginning. There are really, I think, five components to it. Um, two of two of them we all do. One is coupon codes, um, the ability to basically say, okay, this is what our rate is, but if you use a coupon code, you get a discount. You're special, that matters. Um we were fortunate because Dolly would help us build ours. So our coupon code functionality isn't just about lowering rent, it's about packaging and all of those types of things. Dynamic pricing, huge. That's changed our industry crazy, especially since COVID. I think most people that are using dynamic pricing are seeing at least flat, maybe slightly up years, but not necessarily more reservations, but more money. Um, so dynamic pricing is you know super important. We built that, our dynamic pricing out years ago, but we built it out for our clients. So it's very internal. If you we've got unit type capability in the system, and so you can put a number of properties together that have the same pricing, and then um and then dynamically price them. But it's also really good with upsell of services. But the second piece to this is a company called Smith Travel in the hotel industry. Smith Travel, what they did was they kind of connected all the hotels together so that they could capture all of that information, spin it, uh, make it uh normalized, and then share it out to each of the hotels so that they could understand are they were they really

How PMS technology can support concierge services, rewards, and guest retention

SPEAKER_03 33:48

actually doing things properly. And that's you know, Beyond started doing that key data, you know, price uh labs, uh, wheelhouse, there's a whole bundle of them out that are out there now that are doing that. And it's really remarkable and has made a big difference to this industry. So those are the two that our industry has really embraced. But there's a whole bundle of other ones that are out there, and this is getting to the loyalty side of things. The third thing is concierge services. I don't believe our clients are vacation rental companies. I believe our clients are vacation companies. They're short-term stays in most cases, even a midterm stay. They're coming for a short amount of time to something unique. They're gonna do things. You're providing them services so they have a remarkable experience, so they hopefully come back. So being able to do concierge services makes a sense. We're a high turnover asset system. So we can manage anything that flips over. We got clients that have got cars, um, whether they own them or not, that they can be rented, or boats. Also, the ability to upsell things like bicycle rentals and stuff like that. So that makes a lot of sense. But if you look at the resort model and again look at uh what people want to do and so on, tying to OTA, excuse me, POSs, uh like light speed, for example, which is the button and restaurant system, um, makes a lot of sense. If you're a resort, you want to be able to come in and just uh put your wallet away and do whatever you want and pay for it and get all time to come back. It's kind of like the casino cruise boat kind of mentality there. The the next one is group business. And there's really kind of a couple components to that. How do you get groups to come and work with you? You know, we we built out some micro sites so that you can kind of put those on so travel agents can participate in that stuff. Other PMSs have done that as well, but groups kind of fall into two categories. And again, this goes to accounting. And that there's two components there's wedding and then there's tour bus. And tour bus, the guide pays for all of the rooms up front. They're going to pay for it. Maybe the guest is going to buy some sort of trinket or something like that. So you've got to give them the ability. But on the wedding side of things, the father of the bride is probably booking the rooms, but each of the guests is going to end up going and paying for each of those. But the bride's father may pay a few things in there. So group capability is really important. Which leads me to the loyalty program. And the loyalty program is completely different. We don't own anything. Our clients don't own a thing. And so every other loyalty program in the industry takes advantage of, well, I've got extra gas, so, or, you know, I'm going to give away a hotel room or a flight or something like that. Well, again, we don't, you know, manufacture any of those things. Our clients are fine, you know, um, just putting people together. So it's a very different model. We looked at the gift certificate model that is out there, applied a little bit to that. But the bottom line is it really kind of breaks into three kinds of components. Uh number one is how do you collect points, uh, how do you give them out, and so on. Number two is how do you use them, which is really accounting. And the third one, which is the reason why this is a long-winded answer, is because every one of those other pieces, the coupon codes, the dynamic pricing, the concierge services in particular, all play into this. So, how do you build all those things when you don't own anything? You've got to be creative about it. And it's funny because we had a client who left us for one of these all-inclusive systems. They lasted a year, came back to us, and as we were revisiting, we shared with them our rewards program, and he's very high-end and he embraced it. And he came back to us and said, I need like five or six things more to make this thing remarkable. And we worked with him. Uh, he hasn't given me his numbers because he's like, it's a trade secret, because it is so remarkable. But again, it is it comes down to the accounting, it comes down to all of the pieces working together. And I think that's part of the reason why it's tough for the other systems to do it, because they haven't gone to full hotel yield management. And I'm sure I'm missing two or three things, some of which the companies have done that we haven't figured out yet. But we're looking.

Alex Husner 38:00

Yeah. No, no, that's that's a really interesting answer. And we haven't had somebody answer that question it to the level that you just did, or to really consider what is happening in the background of why this isn't possible. So that's that's that's fascinating. Um, and you're right. I mean, we the property managers they they don't own anything. So it's like, what can they do as upsells that's part of loyalty? That's I think probably a lower-hanging fruit of things that that can be done. But again, you still have to have the right system in place that you want to be able to truly reward the guests that have stayed with you and deserve those credits versus the ones that just booked for the first time. I mean, depending on your strategy, but you've got to be able to keep track of that, you know, in a rewards ledger. I'm sure that's built in there somehow of how you're actually translating it. Yeah. Yeah.

SPEAKER_03 38:46

Very cool. It's absolutely fascinating. We're on our second version of this. Um, we do look a lot at Disney and what they do and try and vision okay, how can a small company like Barefoot and my clients duplicate some of what they are doing? So, again, it's not just the industries, it's you know, remarkable players that are in the industry as well, and being creative and innovative and being open to, you know, possibly fail a little bit, even.

What operators should consider when choosing a PMS

Annie Holcombe 39:17

So much to consider there. And and I think that the uh ongoing conversation about loyalty is something that's going to continue to evolve because the one thing that I see and coming from, I started in hotels and then I worked at a large management company, as did Alex, where we had properties all over the place. So you could kind of build a loyalty within people staying within your ecosystem. But the challenge is, you know, I think with the proliferation of channels and people being able to access travel and wanting to like now post-COVID, kind of that experiential travel that's very key, you know, very high on people's radars and people wanting to see more of the world and not going to the same old, same old. It's very hard for one organization to like create something that's sticky because it's like people aren't going back to the same destination every single year. They might come back every couple of years. But so I think that that's something that's that's going to evolve over time. And it sounds like you guys at least have the framework to be able to help people build this out, which is really, really good. I did want to ask you, kind of like moving, going to a decision of choosing a PMS and choosing software. It's one thing that we talk a lot about on the show and you know, what questions people should ask and what people should take into consideration. Um, and we've talked about for barefoot, the the the larger conversation tends to revolve around the trust accounting and the accounting component. And I can say, like, again, firsthand, you guys balance out, which is like very unusual with a lot of PMSs because when you're passing through from channels, direct sites, you've got all these different softwares in the middle of it, there's there's balancing issues. There's there's always balancing. And so Barefoot is very good. And I would put you guys at the top of the heap for like being able to balance out things. Um, but what do you think people need to also consider with all the technology that's out there? What do they need to consider when they're looking at a new PMS? And what do you think that you guys do maybe better or best in class of other things besides the accounting that people should be aware of?

SPEAKER_03 41:14

You took my thunder because um accounting. But accounting really only matters based off of the complexity of your business. If you're if you're in a spot where you're like happy and you're comfortable and you're not looking to grow and you're under the radar uh and you do things right and you have time and you've got good staff, you know, there's lots of great software products that are out there. You know, if if you're struggling to get reservations, you know, some of the systems that are channel better channel managers are a great program. But if you're looking to grow, things start to get complicated, you know, really quickly. What I tend to suggest is I'm a big niche guy. I really believe my clients, if you're a generalist, you will go out of business eventually. Um back when, you know, I started, everybody talked about the vacation rentals being the Wild West. Well, if you look at the history of the Wild West, it started as wild, and then people came in that were smart and innovative, and everybody niche, and those that didn't change died. Um so you've got to really understand your niche. So if you're if you're looking to change PMSs, you need to reflect upon who you are. You need to reflect upon who you want to be and who you want to uh support. You know, it's funny because I've been in this business for a while, and I used to do um sessions at VRMA, for example, and I talked about you know how do you how do you learn niche? And I got a lot of pushback from people because I always emphasize hey, you've got a set of owners. They once were guests, they fell in love with the area, then they fell in love with you. If you understand your owners and you have a great relationship with your owners, then you're gonna understand your niche, but you've got to take it a step further. What they do when they come to visit, you've got to actually offer those services. And if you offer those services, the owners may not use them because they use them all the time. But the guests will start to use them. And a fascinating thing, again, we're in the real estate business and so on. When that property actually comes up to be sold again the second time, that gap between, you know, between properties, you've built relationships with those guests that have fallen in love with the area. They've probably fallen in love with the property. So when you say, hey, this property's coming up for sale right now, they're the best buyers of these properties. And then they become your next client as well. So the most important thing is to truly understand the people that you service, number one. And number two, and this is uh pretty simple and straightforward, but sometimes it gets missed, is that uh every business owner has started this business for a certain set of reasons. They've moved to that area for the same reason owners are moving there. So uh understand who you are, what you like. To do who you like to do it with. You're going to have owners that you really like and owners that you don't really like. And the difference is probably because there's similarities between you. So again, what do they say? You know, cut the 20 most painful and try and get more of the 80% that is remarkable, or the other way around. You know, really understand who you are, really understand who your owners are, and then try and monetize that. That, from my perspective, uh, is how you start to understand which software you want. Can can the software provide the services that I need to provide to my clients and to my future? And I guess the only other thing, too, is realize that the world is going to continue to change. So you need to look at a system that doesn't necessarily work for you now, but will work for you as you grow.

Alex Husner 44:48

Yeah, for sure. We'll be back in just a minute. But first, a word from our premier brand sponsor. For vacation rental property managers, the right distribution strategy can make a huge difference. More visibility, more booking opportunities, and better revenue performance all start with getting your listings in front of the right guests.

Sponsor Spotlight: BookingPal

Alex Husner 45:05

BookingPal helps make that easier. Booking Pal is a channel management platform that lets property managers distribute listings across top channels like Airbnb, Booking.com, Verbo, and more, all through a single connection. They also provide access to growing niche channels like Homes and Hideaways by World of Hyatt and Amex Select Homes and Retreats. But BookingPal is not just about getting your listings in more places. Their platform is designed to help property managers improve visibility, increase bookings, and support stronger revenue performance through better content, pricing, and listing quality. And one of the things that stands out is their support. Every property manager has access to a dedicated account manager and a real support team, so you're not left figuring things out on your own. For operators who want to reach more guests, reduce the complexity of channel management, and work with a team that's invested in their growth, Booking PAL is worth a closer look. Alex Nanny listeners get onboarding fees waived, plus 20% off the first two months when you get started with Booking PAL. Simply click the link in the description to learn more. I can't remember where we were. I think it was maybe in London at a conference, but somebody said that was evaluating software said the first question I ask whenever I'm looking at a PMS is, will you let me see the roadmap? And then, you know, what do I have access to see what it is that you're working on now or what you're being working on in the future? And I guess there are some systems that don't want to say that, I assume, because they don't want to be held to it if things go, you know, different timelines, because we all know that that certainly happens. But I thought that was at least to kind of get a high-level idea of a roadmap, is is a good tip to understand where it's going in the future. But as as far as AI is concerned, I mean, we'd be remiss if we didn't ask you some questions on that. That's the biggest evolution that we're in the in the middle of experiencing as far as not just in vacation roles, but in general uh life experience, I'd say, as far as business too. But where do you think things are going to be in three months, six months, you know, a few years down the line? And I asked that from the lens of we're seeing so much content come out now of people just saying you can connect Claude to your PMS and you can use Claude to connect, you know, every tool that you have and you can vibe code your way to success. And we were at the executive summit and saw some examples of a couple managers, Alex Zemianik. I know he listens to the show, so I had to say give him a shout-out, but he's he's built some really cool stuff. But not everybody is as you still have to be somewhat tech savvy to build out, you know, some of these things. But I mean, where do you see the future going? Is everybody going to just is it going to get easier so everybody can just vibe code you know on top of their PMS or replace their PMS? Or is it still is it wild west and we're gonna all of a sudden come back to a realization that this route is actually not reliable for for

How AI and natural language search may change the booking experience

Alex Husner 47:55

the future?

SPEAKER_03 47:55

Well, I mean it sort of depends how far out you you you uh want me to go, but at least for the near future, I would say, first of all, this is an industry of relationships, and the best vacations are not necessarily the house or that I went deep sea fishing. It's the people that you met and had the experience with. So I think the first place that AI can potentially help us, and this is a really important uh component because as long as I've been in the industry, I have always heard that I'm short staffed. Oh, and by the way, I really can't afford to hire any more people. So but I am what I am, even though it's tough finding people. So having AI duplicate a lot of the things that are slowing staff down from uh being um visible to their owners and to their guests uh is great technology. It's something that uh I know we're doing, we're working towards, but everybody should be looking at it from that side of things. That's number one. Number two is you know, as far as booking goes, um, I believe that the OTAs have done a pretty good job of the making the booking process automated. You don't actually necessarily need to talk to somebody, although sometimes you do because we're all different. And some of us needs have special needs when it comes to vacations, and they can't compromise on that. Although AI eventually should be able to help that. Right now, I don't think we're at that point where you can actually drill deep enough in. And this to some degree is based off of the data that us PMSs have. And we're lucky because when we built out as a high turnover asset system, we have unlimited attributes. So if you want to put that there, there's a wolf gas growth gas stove with six burners into our system, that's great. But a lot of the other PMSs, especially the ones that are more focused on OTAs, they've gone towards standardized attributes because you have to have them swap back and forth. And most of them are yes-nos. So you can't get super deep. So it'll be interesting to see how that evolves. We're coming out with natural, we don't do websites, but we do have a booking engine, and we're coming out like the web companies, with the natural language search capability. And natural language search changes literally everything that most of these, you know, OTAs and PMS systems do, because in the old version, you just clicked a bunch of buttons, they all equaled the same thing, and you got results that showed uh that all these buttons were clicked. But in a natural language uh situation, you you know, you say, let's say, I'm looking for a uh beachfront property, I've got a young family with two you know, teeny ones and an eight-year-old boy. I'm looking for pet friendly with a nice kitchen and a pool. So where does that fit within this search capability? Um right now, most of the language, uh, natural language is just gonna at the bottom go click, click, click, click all of those checkboxes. But if you say if uh the beach front is the most important thing because it's first, then won't you think that the picture that you show on the search results shows the beachfront, even though in the traditional and maybe in the second or third one? But in this case, because uh they said they said uh you know, young family, um yeah, an eight-year-old boy, maybe safety matters more because it's said multiple times. So but in most cases, most systems won't even list that because that is not something so simple to just kind of manage, especially if you're pushing it to um you know the OTAs and stuff like that. So this whole process gets really complicated. You know, descriptions they're static right now. It makes perfect sense, and it's very simple for you know Claude or whoever to rewrite these things based off of the data that you've got in the system. And then you take at one next level level, okay, they're bringing a pet. You know, maybe we need to offer services of a pet. And they mentioned a nice kitchen, so maybe we should offer the services for um a chef. So all of these things. And then probably the most important thing is that you save all that unique content so that it can be used if they don't book, so you can offer something else, or the next time they, you know, reach out to you, which is kind of what all the social media tools sort of do anyway. So I mean, this stuff is is about automation, but it's also in some cases about how uh the booking process can be more efficient but deeper, more meaningful.

Annie Holcombe 52:38

Yeah, this AI conversation is gonna continue. And I feel like we talk about it on the show like literally every week, and and it changes and it's it and it changes from Monday to Friday. So it's you know, there's a and no telling where it's gonna be. But I would be remiss um before we let you go, in not touching back on your roadmap and kind of like, what's the future for barefoot? Like what, you know, where do you see the you know your platform in six, 12, 18 months? Like, what do you guys have in the works that you can share with us?

SPEAKER_03 53:05

Yeah, so we're working on a six version. Uh, it is an AI version. It will change things significantly. I already mentioned the uh natural language search capability. We are really focusing on trying to make it so our clients staff are more efficient. We've got lots of alerts and components. We've got work order systems, we've got reminder systems, we've got outside, you know, payment documents and stuff like that, putting that all together. I kind of call it a CEO report, but it's unique to each individual person so that they can actually see what they actually really have to do today, which is pretty straightforward. I mean, we have that all built already, but putting it into one nice little packet and then also being able to have the manager follow these things, kind of like what a unified inbox sort of is supposed to do, and so on. Um, we will continue to add more POS capabilities. We are actually adding more OTA stuff. We will have booking.com, and it's interesting because we did a integration with booking.com years ago, but we could never make it work because it was always pennies or dollars off, and we finally gave up on it. The world has changed. We're going to be releasing that very soon. I'm also happy to say that um we just entered in a contract, it'll be about a month or two, but we will be integrating with Furnish Finder. We're the first um company to be integrated with them. There is a remarkable company, and that is an industry that has so much potential. Uh as I said earlier, yeah, my clients, 85% of them do some form of uh midterm rental. And uh so we need to go there.

Alex Husner 54:43

Yeah, that's great. And we we've had Eric on the show just a little bit ago, a few months ago. But yeah, that's that's great. Good to hear that. And yeah, it's it's so cool to learn more about just everything that you guys offer because I think we said this in the beginning, but it's like, you know, we've our me personally, I've I've known a barefoot, I've known you, I've known Claiborne and the whole team for a long time. But I don't think that I had any idea the the depth of what you guys have behind the scenes. And it's just it's exciting to see all that there is there and just you know the foundation you've built to be able to continue continue having more, you know, and and building it the right way, building it on a foundation that that truly understands what what needs to be built. So this this was uh an interesting and an eye-opening conversation. I hope that I'm sure our audience did enjoy it as well. And uh, we look forward to seeing you at conferences later this year. Are you do you have any plans for upcoming shows, Ed?

SPEAKER_03 55:37

Well, I'm actually going to high tech in two weeks. But I go to that show because it is hospitality technology, and there's always something to be learned there. And the additional thing is that we are seeing the crossing of especially in the resort side of things, where you know, you have a resort, they may have a hotel, they may have a spa, and they have a whole bunch of vacation rentals. Well, hotel software is not built for escrow accounting. And so they can potentially get themselves into trouble. So we're interested in understanding that market, being part of, you know, a bigger connection. We are an all-I consider ourselves a wall in one system, but we aren't, we don't have to be the best at everything. We'd rather work with the best, and that means working with the companies that that's what they focus on. So we're not gonna build a hotel software system, we're gonna link with one. We're not gonna build a spa system, we're gonna link with one and make it as seamless and as efficient as we possibly can. So high tech is the next really big one. We're going to a midterm rental um event in San Diego. Denise is going over to that one um in a couple of weeks, and then we'll see you at the VRMay show. And hopefully Favor as well will be there as well. So, anywhere, I'll tell you what, you tell me where you guys are going and we'll share with all the both will be there. I'm okay with that.

Alex Husner 57:03

Yeah, we might need to bring a lot of bags for all of us, but yeah, no, I love it. Yeah, we'll we'll be at uh VR Ma for sure in the fall, and I'm not sure about the other shows at this point, but we've got a busy summer coming up with a lot more episodes and content for the audience, so we got to stay home to make that possible for a little bit.

SPEAKER_03 57:23

Thank you for enlightening this industry. It is a remarkable industry, it is still relatively young. There's so much we can learn from other industries. And the interesting thing is the other industries are learning from us probably faster than we're learning from them. Hotels in particular. Because they embrace this even though they won't claim it.

Alex Husner 57:43

Yeah, that's very true. Well, Ed, if anybody wants to get in touch with you or just uh learn more about Barefoot, what's the best way for them to reach out?

SPEAKER_03 57:53

Uh Ed Ed.ulmer, U-L-M-E-R at barefoot.com. My cell number is 508-454-8528. We work the hours that our clients work, so call me. Um, and then I've got a remarkable team. Claiborne is probably um the best one to reach out to Claiborne at barefoot.com. So thank you. Perfect.

Alex Husner 58:17

Great. We'll put all that in the show notes for everyone. And if anybody wants to get in touch with Annie and I, you can go to alex and anniepodcast.com. And until next time, thanks for tuning in, everybody.