The Vacation Rental Key with T and T

Episode 8. Summer 2025 Not What You Were Hoping for? T and T are here to help Make it Better!

• Tim • Season 1 • Episode 8

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The summer season is more competitive than ever with economic headwinds making travelers discerning and increased supply in many markets. Tim and Tiffany share actionable strategies to maximize your summer business without panicking or devaluing your properties.

• Don't panic and drop rates – implement a thoughtful, data-driven review process
• Understand changing booking dynamics like the shift to shorter stays
• Communicate clearly with owners and understand their specific goals
• Use dynamic pricing tools but override algorithms when local knowledge dictates
• Target your existing customer base with exclusive offers and personalized outreach
• Create value-add programs instead of slashing rates (gift cards, event tickets, welcome baskets)
• Fill "gap nights" between longer bookings with strategic discounts
• Use data analytics to identify which dates are being searched but not booked
• Review and optimize your listing presentations across all platforms
• Scrutinize all discretionary spending and recurring subscriptions
• Monitor overtime and staff scheduling closely
• Re-forecast your budget if revenue projections have shifted
• Review credit card charges line by line and negotiate with vendors

Choose one or two points from today's discussion and put them into action this week to improve your summer performance.


Speaker 1:

You're listening to the Vacation Rental Key with T&T, the podcast for vacation rental managers by vacation rental managers. I'm Tim Cafferty and I manage two companies, one in Virginia and one in North Carolina. I'm one of the two T's.

Speaker 2:

And I'm the other, T Tiffany Edwards, born and raised in the vacation rental business. I help manage our family businesses from Key West all the way to Kauai.

Speaker 1:

In the next 30 minutes we're going to give you our keys to success in the vacation rental business. To success in the vacation rental business. Welcome back everybody to the Vacation Rental Key with TNT. Happy summer Tiffany, happy summer we're right in the middle of it.

Speaker 1:

Oh, my goodness, it feels like it's been summer for about a month, but I think the calendar says it just happened this past weekend. So we are into it and with the summer season we're at go time for a lot of our folks that are listening out there. You know, the landscape is more competitive than ever. The post-pandemic booking frenzy is settled, economic headwinds are out there and they're making travelers more discerning and supply has increased in many markets. So this means that simply having a property isn't enough. You have to be proactive, you have to be data-driven, you have to have strategies to make sure your summer is as successful as possible. I hope you agree.

Speaker 2:

Absolutely, and whether you're a seasoned veteran in this business or you've just started in a post-pandemic, the information we're going to share today is vital for the summer slowdown.

Speaker 1:

I think a lot of the markets that we're speaking to right now are seeing that slowdown If you read any of the national trends that's happening. And so here we are in late June. Is it time to panic? No, we are here to calm your nerves, don't panic, but you do need to get some stuff going to make sure you have a great summer season. So we've drilled it down to a few points here today. Again, we like to number things and give you takeaways, and I think people are going to appreciate a few items on here that maybe they didn't have on their list, and they can make proactive decisions right now to make your summer the best it possibly can be.

Speaker 2:

Absolutely, and with these points, they follow into two separate buckets, really focusing well, three actually really focusing on revenue and rates, a marketing component and then overall review of your expenses. So let's just jump right into that. Rates and revenue, tim, you mentioned earlier. Don't panic, that is number one that I would like to share with everyone. A lot of people just assume that you should drop your rates and continue to drop them because you get nervous and scared, and you cannot do that. You need to be very thoughtful about your rates and not make a knee-jerk reaction to devalue your properties. Instead, you need to implement a thoughtful and data-driven review process. And you know, tim, you mentioned some of this earlier in an article I'd love for you to share about.

Speaker 1:

Well, some of you may have noted that one of your co-hosts was mentioned in the New York Times. Actually is the first two words of the article you pointed out to me.

Speaker 1:

It said- Above the fold. Above the fold, I was news for a few minutes and it didn't even have any caveats like convicted felon Tim Cafferty or anything like that. It was actually industry specific. So I was very honored by Sydney Ember who called me and did a great job on that story about bookings overall. But I talked about, and she highlighted in that article, the changing dynamics of this summer's bookings. We took some proactive steps here by two companies but they were thoughtful back to your point about not panicking and they were responsive to the trends we picked up on. Talk to the people that talk to the people. What are your reservation agents telling you about their interactions with guests and what can you do to get to yes when the guest calls to book a property? That's what I think we really should think about.

Speaker 2:

And most of those. What to get to? Yes, common trends between a lot of your potential guests. So identifying what those trends may be, and then how do you make decisions or assimilate to those trends?

Speaker 1:

Yeah, the trends for us in this market, the two markets I'm in traditionally seven-day rentals. I know some of you are out there scoffing ah, that hasn't happened in the age. Well, I guess we were the last to adopt less than full-week bookings and it made a huge difference for us. We've booked more than 400 stays between Memorial Day and Labor Day on less than full-week stays and it's saved our bacon.

Speaker 2:

And a lot of people who may be listening, tim may not understand the structure of some of your properties. You have larger homes, so, and in an area that typically doesn't open up for less than seven days. So this is actually a very, very big, dynamic switch from the guest and what the consumer is wanting.

Speaker 1:

Another thing under that is making sure you know what your owner's goals are. Now, I just mentioned that we moved to less than full-week rentals, but not all of my owners were on board with that and it's important that you know. Is the owner focused on occupancy at any cost, or do they prioritize a higher ADR, even if it means fewer bookings? You need to tailor your strategy to their specific financial goals and communicate clearly. Communication is really the key on this. You must overshare with your owners so they can't say later I never heard from you.

Speaker 1:

Actually, I usually have a story. I had an owner contact me last week about how slow bookings were and the lack of communication they had on our part. I can't get a hold of anybody. So when I went to investigate the matter, I found the owner had been contacted 53 times by our owner relations staff since January and almost every communication it was about his rate structure was unrealistic. Of course he's a doctor, he's not wrong. He keeps weird hours and in the end we found in that particular case our manner of communicating was not resonating, so we switched it. His rates have reduced, by the way, tiffany, and, amazing, he has bookings now.

Speaker 2:

Amazing and after only 53 tries you could get there. 54th one did it. Fourth is the trick. You know the other part that we do with the owner, communication as well is take an approach for their property but also give them, and paint them, a picture of the overall community. So what are we seeing within the area and then what are we seeing overall of an industry trend. So it allows the owner to understand in a broader sense how they level in comparison to a local area and then to the overall industry.

Speaker 1:

I hope all of you have some sort of dynamic pricing. It's really non-negotiable Tools like Beyond or Price Labs or Wheelhouse. They are your best friends in this situation and leverage that data, emphasize the use of that software to identify which types of properties are falling behind. For example, smaller properties might have a bigger issue than properties with a different location and they might be more flexible to fill those last-minute gaps, while the larger, high-value properties might need earlier and more targeted bookings.

Speaker 2:

Yeah, and Tim, that's so important too, because when you segment your properties from the lower breadroom count to the higher, you really have to look at what is your window of when you could get someone back in. So if you're down in occupancy, but it's for some of those one, two bedrooms, you do have the opportunity to kind of change those rates and compare them to the area and get those bookings, whereas those five bedrooms four bedrooms you need to look a little bit more into the weeks to come, months to come, to pick up on some of that occupancy or specific market insight may lead to better decisions.

Speaker 1:

For example, last August I remember there was a particular operator who I won't name their name, but the software suggested a sharp drop in the daily rates on specific properties. But that person said what the software didn't know is we have a huge festival that's coming on this particular week. It's going to draw huge crowds, but they don't book until 25 days prior to arrival. So that's where really the expertise came in and overrided that algorithm and it really gives you the opportunity, as the manager, to highlight your value.

Speaker 2:

And we actually just internally had this conversation last week because we had a similar event that is upcoming and know that other people in the area are dropping their rates. But we have got to hold because we know that we're going to get those last minute bookings in there and we know that we can drive it through different marketing.

Speaker 1:

You know one of the other things we've seen. I'm not sure if I've shared this trend with you, but the week of July 4th, which is like next week, is very soft, and my experience as a manager I have been doing this for more than seven years when July 4th falls on a Friday, bookings are in the commode. People just don't travel when July 4th is on a Friday, for whatever reason. I guess they stay at home and enjoy the fireworks there. They don't have extra days off. I don't know what it is, but it is a trend and it's something we were able to anticipate because we had the knowledge of history.

Speaker 2:

That's a really great takeaway. Holidays, and when they fall, are really important to make sure that you focus on.

Speaker 1:

Okay, so is that number one? Did we actually number that number one?

Speaker 2:

mastering your rates and revenue. It's more than just a number folks. We've had in particular units, what days they're searching for, so we can develop a better strategy and also really understand what the market around us is starting to drive. So you need to really look at that, if you have it, and go to a unit by unit level or property by property yeah, unit.

Speaker 1:

I don't want to have a unit on a property. Don't get Doug Kennedy started on units, He'll scold us. Okay, so that's number one. Number two would be, let's say, precision marketing, not just marketing and guest engagement. Let's hit some points on this one, Tiff.

Speaker 2:

One of the things that I feel like are so underutilized is, at this point in time, instead of pressing panic, to really understand that your most valuable asset is your existing customer base. So you really need to focus on implementing targeted email campaigns with exclusive offers to those brand loyalty guests. Use the social media to generate those magic moments of guests enjoying time. Help get them encouraged to want to get away and replicate that memory and really consider picking up the phone. We start to do cold calls at that point and let people know we miss them and encourage them to come back and stay with us.

Speaker 1:

The old FOMO. Nothing like seeing a picture of a family sitting at the beach and you're going gosh, I wish we were there. Okay, so I'm going to add something to that, literally and figuratively. How about creating a value-add program, instead of just lowering rates and advertising specials? Don't race to the bottom on price. Instead, offer incentives that add value without slashing your ADR. Okay, tim, what does that mean? Okay, how about gift cards to a popular local restaurant? Or maybe there's an attraction in your area, maybe there's a concert or a festival and you could offer tickets to local events. Or maybe, if you do less than full week stays, a percentage off the extra night to encourage a longer stay. Or maybe even curating a local welcome basket with regional treats and insider tips. It could feel like they're getting something special by booking with you.

Speaker 2:

Absolutely. And then you're not training the consumer to wait to the last minute and get a lower rate, your value add and I love the idea of a local welcome basket because it's just a nice hospitality first impression. When you walk in they know they're getting something, but they don't exactly know all the other treats. And while you can implement all of this at last minute, I would really suggest that in the off season you start to curate the relationships with other local businesses so that you have some type of quid pro quo, so that in the time that you may need to offer gift cards or some of these services, you can call up other local vendors to make this happen.

Speaker 1:

If you're anything like me, whenever I'm out in the community and I see those owners of those businesses, what's the first thing they do when they go up to you? How's business? What does August look like? Are we going to be busy this year? That's a great opening to say, you know what. We are going to be a little soft for a particular week. But I was thinking about calling you. Would you be willing to offer a gift certificate that we could pass along to a guest if they booked a certain week? I think you'd be surprised. The answer is going to be yes. And if you're sitting back going, yeah, well, I don't really want to take on the expense for a welcome basket. Well, maybe your owner shares the expense or takes on the expense because you maybe have them in the mind of reducing the rate. Say, hey, I've got an idea. Instead of reducing the rate, let's do this. Instead, we'll do a charcuterie tray for this guest and we'll discharge you for it, but you're going to get full boat on the house. So lots of ideas.

Speaker 2:

I also love the fifth night, and this goes into our next comment. But you already have a discounted rate, so they're not having to pay another cleaning fee. So it's already a lower rate and you don't necessarily have to lower it even more because they're still getting a value there.

Speaker 1:

So I've learned a new term in the last many years gap nights. I don't know what I thought that meant at first, but I have identified now. So there's little gaps that you can't fill and what do you do? It's lost revenue. So identify that lost revenue by maybe quantifying the potential loss from those frustrating one or two night gaps between those longer bookings. You could realize maybe another half million dollars in potential loss revenue from gap nights across your portfolio if you look at this.

Speaker 1:

So maybe implement an automated text message to your guests before they arrive or after they depart for a previous booking. Before they arrive or after they depart for a previous booking, offer a discounted rate for those specific gap nights to fall into what Tiffany was just saying there. Important caveat, though, is clearly state if a cleaning fee isn't included in the discount gap night to manage those expectations. Ensure those discounted rates are preset within your rate system to make sure it's seamless and you don't look like a blithering idiot when they call and ask about it and the person on the front line doesn't have any idea what they're talking about.

Speaker 2:

That's so important Underline, highlight, make a note of that. So one of the other marketing strategies that your team needs to be looking at is data-driven marketing through Google Analytics Any of your Google paid analytics. You need to be reviewing what your Google ad performances are and what search terms are converting. More importantly, what terms are not converting. Take them away and then reevaluate what your ROI is.

Speaker 1:

Why are we paying $5.24 a click for this term? You would be shocked, and this is going to come up later too. This does require some work on your behalf, mr or Mrs Company Owner. Just set it and forget it. Look for yourself and see what you're doing. So, in addition to that, if you use a tool like Yon Pricing or whatever, use the market data insights into your revenue management software, they often tell you which dates are being searched for the most but haven't been booked. This is gold. Folks Target your marketing efforts specifically on those weeks or dates and if you're really a data nerd, you can look and see where the trends are about where people come from at that particular time. I was shocked to find out one of the biggest markets for the Outer Banks at the end of May. Want to take a guess, tiffany? Oh, put me on the spot. I didn't prep you on this. No, you're not going to get it.

Speaker 2:

I'm not going to get it. I admit failure already. Well, it's more of a surprise. I admit failure already.

Speaker 1:

Well, it's more of a surprise. St Louis, missouri, really, how about that? The schools get out in mid-May and I guess we're the closest to East Coast Beach. I don't know but the number of Missouri license plates driving around, it's a little late for that now.

Speaker 2:

But if you can find a trend for the future, seize it or use it for the future. Now you know you can target that marketplace and then you know that you can look to see when their schools are out and start targeting them ahead of time. You know we did this for our business yesterday where we found this massive uptick in searches for a specific 30-day timeframe that historically has not been very high occupancy in the fall, and so we have now targeted that completely in our next round of marketing.

Speaker 1:

Fabulous. Hey, here's another idea. How about following up on leads that didn't close? You get those inquiries and they slip through the cracks, or we like to call it crumbs that fall off the plate. Have a system for picking up those crumbs. Follow up with those potential guests who showed interest but, for whatever reason, didn't book. A personalized email or maybe a call with a tailored offer for them can convert those people. And, worst case scenario, maybe they book with someone else and you find out why. Again, good information for the future.

Speaker 2:

Yeah and Tim, I can't stress enough that personalization. Please don't make it look like a chat GPT automatic response. Really try to figure out a way to personalize it.

Speaker 1:

Okay, now on the last of this precision marketing and guest engagement number. It's really in my craw and I told you a moment ago. As company owners, you need to roll up the sleeves sometimes, and this is where it comes. Optimize your listing presentations. When's the last time you went to your website and looked at the pictures or the descriptions or a third-party website? Professional, high-quality photos are non-negotiable. We know that you need to update them seasonally or after any upgrades. Consider drone shots. There's nothing worse than seeing a picture of a house with a pool. It's the end of June and the picture of a pool has a cover on it.

Speaker 1:

Really, come on, folks, make sure you go through those descriptions. Have you got compelling, benefit-driven descriptions that highlight the unique amenities of the property, the local experiences and address those guest needs Like perfect for remote work, family-friendly features, dog-friendly house, and then go to those OTAs. So Sarah and I famously did a spoof, if you will, on terrible Vrbo listings. When's the last time you looked at those? Just take a few hours and review your images, the listings, particularly on Vrbo and Airbnb. Are your headlines relevant? Are the headlines dated? Book by May 20th to get a special look at it through the guest's eyes, you will be surprised. That's all I'll say.

Speaker 2:

Yeah, tim, that's so important because I think a lot of our reservationists end up looking at our site many times just as a reference, but you don't necessarily go into the OTAs, and so you may even look at it from the Vrbo or Airbnb, but you may be using other OTAs, and the other thing is that look at it on your phone. So many people spend their time researching looking at their phone and not at a desktop, and you really need to make sure that all those pictures come through consistently on a mobile device as well, and I'll go back even more so when we talked about driving in and dialing in to specific properties. You really need to go to those specific properties that are not doing as well as the year previously. Go and look at all of the different listings that you have and make sure that they're coming across in the way that you intended with, say, all of the amenities and features and great pictures.

Speaker 1:

I had that happen to me earlier this year. There was a property that was lagging. We looked at it on our website oh looks great, and just the blind trust that everything was feeding through properly. One morning two of us looked at the house on Verbo. The money shot was the outside shower. What that's? Picture number 53. How is that the number one on the rotation? So we had to go back to Verbo. We got it corrected eventually, but that owner never forgave us for the outside shower in the first picture.

Speaker 2:

Oh yeah, well, I'm glad you found that and that's a note to everyone else out.

Speaker 1:

Yes indeed. Okay are we wrapped up number?

Speaker 2:

two Can we go to?

Speaker 1:

number three.

Speaker 2:

I think we're ready for it All right. So number three we've talked about marketing, we've talked about revenue. Now we've got to talk about how we're cutting expenses. So, lean operations and cost management. You need to be doing it all the time, but right now that needs to be a major focus. So, first and foremost, right now we're reviewing all of our discretionary spending, so we're taking a hard look at all non-essential expenses and where we can trim fat without impacting the guest experience or property quality. For the last couple of years, when the cash flow has been high and occupancy has been high, you want to do everything and buy everything, even as it relates to maintenance costs. What all are you buying in supplies and inventory? You need to be watching some of that and you need to challenge every reoccurring subscription or service. Is it still providing you value? You need to take a deeper dive into that.

Speaker 1:

Again from the trust department. You should inspect, not expect, or, as Ronald Reagan used to say, trust but verify. How about overtime and payroll? When's the last time you looked at the time cards? With potentially fluctuating booking patterns, you need to closely monitor staff hours. Can you cross-train staff to make sure you don't have excessive overtime? Do you have one particular individual who seems to have overtime every week? Maybe there's some corrective measures you need to take Scheduling being done effectively to minimize that unnecessary overtime, especially for your maintenance team and for your housekeeping crews.

Speaker 2:

So I'll tell you a horror story, tim, that I just recently experienced in one of our companies. Please, so, please. This is it'll make you cry. So in one of the businesses, we realized that a specific individual had an absorbent amount of overtime, and part of it was because, even if they were on vacation or had PTO, they were still collecting overtime just by coming in 20 or 30 minutes early or late each day. So for some reason, that individual wasn't flagged, and so that was a significant amount of money. That was just a very easy review and course correction. So you really need to dive into those numbers and also remind your employees or your colleagues of what your actual policy is as it relates to some of that overtime, because that will start to get you during this peak season.

Speaker 1:

That's where supervision comes into play as well. I know this next little bullet line item. It could be a podcast onto its own. In fact, it may be a podcast onto its own coming soon. And that's adhering to your budget and then re-forecasting. Tiffany, what do you got there?

Speaker 2:

You need to be reviewing your current spending against established budget. One of the things that we're looking at and I know we mentioned marketing, but calling your database of former guests shouldn't be a cost you need to be looking at what does your overall marketing budget look like? We're doing that right now and before we hadn't put in several sponsorships for local community events that don't necessarily drive a lot of bookings to our area. We're probably going to have to cut some of those and then really reassess what's great for the community and being a community partner, and then what's just because it's a friendship thing and we're giving money out to. You really need to have some discernment there and you really need to come and look and reevaluate that budget and make the necessary changes. If your revenue projections have shifted, you've got to reforecast your budget for the summer just to ensure that you're remaining profitable for the rest of the year.

Speaker 1:

Yeah, I've had numerous occasions I think I've mentioned here. We run our company as an open book management company. We do our budgets. The year before it was in the fourth quarter of last year we did our budgets. So I had one of my department heads say look at what a great job I'm doing on saving money on expenses. I haven't spent all of my money. I've only spent 94% of my budget and we're almost to the end of the quarter, like, yeah, but our income is at 64%, you still spent 94%. It's a fail, oh my God. So there you go.

Speaker 1:

Hey, another one that's a pet peeve of mine is scrutinize those credit card charges. Go line by line through your business credit card statements. Are there unrecognized charges? Are there duplicate payments? Are you getting the best rates from your vendors? Negotiate where you can to make sure you're getting the best price.

Speaker 1:

And I always like to go back to the advice I got from my dear old mother and that was sign your own checks. That was advice I got from mom. Of course, that was in a day and time when we signed checks. I still do sign a few checks, but that's the literal portion. But there's also a figurative portion of signing own checks, awareness of what you are spending and what you are receiving. If you ignore those auto charges on services that you subscribed to two years ago, that Tiffany sort of alluded to, before you're writing that check, whether you realize it or not, that's what you're doing, and so go back through there and go. What is this line item? What is Elm Street Technologies? Does anybody know? Nobody knew, but we're paying them $250 a month or something, so those things happen.

Speaker 2:

And that adds up. I know I had mentioned this earlier, but I really feel like maintenance department whether you have it in-house or it's contracted is something that you really have to dive into, especially right now because everyone is driving costs up. So some of these preferred vendors, how much are they increasing in some of their rates that you're getting and having to pay for? Are you the bank for a lot of these owners? Are you getting paid back by some of these owners? And then, if you have a maintenance in-house I'm currently in the middle of this but reviewing all these receipts, he overpurchases and then just puts it in as inventory, but it's not categorized within our system of when we're pulling that inventory back out, and so you really have to review a lot of those receipts and understand what you're purchasing within a given timeframe and are you utilizing it or do you need to return it and change out your policy for maintenance purchases?

Speaker 1:

I have a new one that's just surfaced in the last few months for maintenance purchases. I have a new one that's just surfaced in the last few months. We have a few vendors that we use that are outside of the country. We were getting tariff charges on the goods that we were purchasing from them and I did a deep dive. I'm like wait a minute, you're just providing service, You're not providing us a good.

Speaker 2:

There's no tariff on that. What are you doing to me here? Oh, you're right. Oh, we'll take that off the bill, no problem, can't just charge us. So if you weren't watching those bills, if you weren't paying attention to what time frame you had already placed the order, and or if it was already in the United States and not a part of that tariff exchange, you need to come back and make sure you contact that vendor.

Speaker 1:

So we've given you three. Is there a fourth, or do we have just three areas?

Speaker 2:

I don't know. I think I'm overwhelmed just by the story. You know, I felt really good that I was doing all of these things, but now I'm like man, I need to really get to work.

Speaker 1:

Maybe go back and try again. The summer season is prime time for many of you in vacation rentals, but success in 2025 demands more than just opening your calendar. It requires strategic pricing, targeted marketing, meticulous guest experience management and, of course, smart cost control. By implementing these steps we've given you from reviewing your rates with purpose to actively pursuing gap nights to scrutinizing your expenses you'll not only fill your summer calendar, but also set the stage for sustained success throughout the year. Don't wait. Choose one or two points right now from today's discussion and put them into action this week. We want to hear from you. The bottom line is we'll look forward to you thanking us.

Speaker 2:

We're waiting.

Speaker 1:

Okay, so that'll do it for this episode. I think we've already teed up what the next episode might be. You want to get into that a little bit, Tiffany. Let them know what's coming down the pike.

Speaker 2:

Absolutely. You alluded the budget, so we're talking about things you can implement right here, right now, during this different time of summer occupancy, but you also need to be taking a much deeper dive into your budget. So that's what we'll be chatting with, and we may have someone come and join us who is a master at spreadsheets and P&Ls.

Speaker 1:

We have spared no expense on this guest and we have a good idea that he will be here, so you can look forward to that. Until next time, keep after it, folks. So long, bye-bye.