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Yield Management Why How and Intervention

By Wm. May
Published: 12/05/17 Topics: Comments: 0

Vacation rental rates are the most misunderstood skill of expert vacation rental managers. They escalate owner income, but may be perplexing to owners or even ignored.

Not many years ago, lodging rates were simple and easy for guests, managers and owners to comprehend. Higher in the high season, lower in the low season and in-between other times.

But in recent years, sophisticated Inns, Resorts and Vacation Rentals have adopted the practice of "Yield Management" to set rates and revise them constantly, which is known as "Dynamic" rates, due to the fluctuations.

The goal is to achieve the highest possible rates in the highest seasons, modest rates in shoulder seasons and to lower rates in slow seasons, in hopes of attracting guests who would normally not travel then.

Lodging is like what the grocery business calls "perishable inventory." Fruits and vegetables not sold quickly become worthless when they rot. Lodging rooms and homes become worthless each day they do not rent.


Decades ago, airlines were going bankrupt due to uncertain demand for seats. Some days planes flew full and other days mostly empty. With fixed costs and total income limited, they could not make ends meet.

Over time, they learned to increase rates for desirable dates and routes and lower them for less desirable dates and routes, which enticed flyers to fill the empty planes. Rates were raised and lowered daily, sometimes hourly, for future flights.

It is not too great a statement to say "Yield Management" increased income without increasing costs. None of this would have been possible without sophisticated software that made changing rates fast on thousands of flights and seats.

In time, giant hotel chains embraced Yield Management. Even Disney theme parks adopted variable prices to encourage visitors to come when they had room in the property.

As Yield Management became standard procedure for lodging, some guests objected because they wanted rates to stay flat and low. But luckily, consumers embraced the new pricing practices, because they could save money by planning ahead or pay more for the dates they preferred.


The foundation of Yield Management is based on the old cliché most of us learned in school called "Supply and Demand." In short, if many people want to buy a product of limited supply, the seller can increase the price. But if few or no buyers want to buy, the only way to attract purchases is to lower the price.

At a young age, none of us questioned that logic. However, determining the demand for lodging is difficult because guests may book the property days, weeks, months or even years in advance. That makes it necessary to project demand in advance. Most properties set rates 13 months or longer.

Demand for those future dates is based on many seemingly predictable factors, such as day of the week, seasons, holidays and even weather predictions. Changes in gas prices, airline rates and lodging taxes upset rates.

But rates are also affected by what competitive lodging operators and even lodging properties in other geographic destinations do. If they lower rates, managers must decide whether to match prices or lose bookings. If rates jump up, pumping up the rate quickly avoids selling nights too cheaply.

Lastly, the trends for overall demand can be upset by macro factors, including the general economy and catastrophic events such as 9-11 disaster and the 2008 recession. Those cannot be predicted, but good math requires fast response to those changes.


After incorporating supply and demand into a complicated formula, many factors can be employed by smart managers. Those include day of week, holidays, seasons, special events, etc.

The end results in what might be called a "Per Unit Per Day" (PUPD) Pricing system. Every unit may have a different rate for every day of the year. And every rate for every future date may change every day or even more often. Changes seldom jump dramatically on any given day but over time, the trend will be decidedly up or down.

Although software and artificial intelligence is essential to manipulating rates so rapidly, the system also requires constant surveillance and personal intervention when research indicates rates that are outside a reasonable range. This all takes time and expertise. Managers have a larger view of local and regional trends than owners.

That knowledge allows for overrides to be incorporated that affect all units, or just a single unit, for either a day, a week, month or longer. For example:

Base rate to establish comparability

Early purchase discounts

Last minute discounts or premiums

Mid-week discounts or weekend premiums

Discount or premiums for "orphan" dates

Adjustments for length of stay

Weekly & Monthly rates

Minimum rates midweek or weekends.

And all of these variables are compiled with the overall trends, local knowledge and the ever-changing mathematically suggested rates.


Although Dynamic rates produce more net income for owners, they produce a problem that confounds lodging managers.

Of all the devices in a casino, the big money makers are slot machines. But why? No gambler gets rich playing the slots. Often they are low stakes and winnings are comparatively low. But people love them and are enamored with watching the numbers roll up and on - always hopeful for the big score.

Dynamic Rates can have the same effect on some home owners. They become addicted to watching their calendars, bookings and those ever-changing rates. That leads to a problem summarized as, "Damned if you do, and damned if you do."

Every owner wants to believe that their vacation rental home will be the most popular, because they love it and surely guests will love it, too. They see their home as better than others in the area, and most perfectly outfitted and desirable. They love to see high rates, but are discouraged when they see their beloved home set lower at other times.

Setting rates high will please the owner, but too high will produce lower profit. Setting rates too low will make owners unhappy, even if produces more income. So how is the manager to react to owner rate suggestions?

When faced with that dilemma, managers have only one good option - and that is to educate owners with the science and math that rules lodging rates in today's world. To ask they allow managers to use their expertise to balance all those factors to produce the highest possible income for owners.

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Author: Wm. May – Volunteer, Vacation Rental Association
Blog #: 0570 – 12/05/17

Indentured Servitude Comes to Vacation Rentals

By William May
Published: 12/01/17 Topics: Employment, Housekeeping, Vacation Rental Management Comments: 0

There is a hidden under belly about how Venture Capitalists are entering the Vacation Rental industry in hopes of dominating it to cash out for big bucks.

It appears some pursue growth at all costs, by over working staff, and even evading labor laws that call for overtime wages. Jobs are hard to come by, and they take advantage of well meaning employees who have no other option but to work far harder for far less.

Her real name is being withheld for fear of retaliation, so we'll call her Susie. She worked for some years for one of those VC backed firms hoping to amalgamate the industry by buying up local vacation rental managers and taking over their listings.

Nothing wrong with that, if you like the corporate approach to what has previously been a very personalized service business. In fact, at the rate that some of these venture capital backed companies are hemorrhaging money, it is no wonder they survive by taking advantage of workers.

Susie was hired to clean homes and provide property services but the job quickly turned into 80 hours weeks, for a set salary appropriate for 40 hours. She was not paid for the extra hours and did not receive payment for overtime, nor the time-and-a-half hourly rate required by law.

Those companies skirt the law, by trying to claim employees as contractors, or managers making them exempt from overtime compensation. It is a ruse that sometimes works, but is never considerate to people who work so hard.

Susie said she never received a day off in several years, nor the promised paid vacation time and when she begged to hire additional housekeepers was told, if you don't like it you can leave.

Susie fell for the "We are newer, and smarter, and bigger and better than all those local Podunk managers. We are going to take over the world with technology" and you are going to be part of something great. Working hard will have its rewards.

For Susie that meant constant fatigue, dawn to dusk duties seven days a week, a rude supervisor, corporate officers who could care less, and the constant threat of job loss - if she was to raise a complaint about off-the-clock hours.

Was Susie really just a disgruntled employee? Not really. For years she drank the "upward mobility" poison that corporate workers have been swallowing for years. That working long and hard will benefit them in the long run.

Pursuing career growth and personal achievement is a requirement in many industries. But in Susie's case it was all led by a few corporate officers who constantly praised themselves but fail to honor the most sacred of business ethics - to provide proper compensation from line staff who do all the heavy lifting.

Eventually Susie just could not take the grind any longer. She quit with no prospects for a job elsewhere, "I didn't plan it" she said, "But I just could not do 80 hours a week anymore."

As a service business, vacation rental staff are what guests and owners come to appreciate. There is no sense in doubling listings if complaints triple.

Smart owners realize that people like Susie are, and have always been, the backbone of vacation rental management. Without the Susies of the world, renting out a home is a risky investment.

Since she left, Susie's prior employer has hired and lost additional workers just like she. They struggle to find new employees and can’t keep good people. They advertise jobs constantly because the word is out about their employment practices.

Reputable companies don't build their business by over working staff, or promising more than can be delivered. "Its no wonder quality lacks and they have so many online complaints" Susie notes, "Everyone works so much, that we just don't have enough to give. I tried, I really did. But 80 hours a week is too much."

Worst of all, property owners are no longer getting the care and consideration they deserve. They see a revolving door of housekeepers and maintenance workers and that causes quality to suffer and commitment to wane.

Smart property owners are learning to evaluate management firms by their staff and not by misleading promises that bigger is better. In vacation rental management, local is what makes it work.

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Author: William May – Volunteer, Vacation Rental Association
Blog #: 0565 – 12/01/17

Vacation Rental Picante Sauce

By Wm. May
Published: 09/01/17 Topics: Lodging Management, Vacation Rentals Comments: 0

Vacation Rental Picante Sauce
Yet another corporate vacation rental management company has announced gobbling up tens of millions of dollars in investment, in hopes of dominating the vacation rental management industry in America, and perhaps even the world. But they are risky for property owners.

Beginning as far back at 1989, Pace Picante sauce began running television commercials. In one, grizzled cowboys threaten to lynch the camp cook when they learn he has been serving them picante sauce from "New York City?"

The cow pokes become offended because Picante sauce should be made by "places in San Antonio with fresh vegetables and spices by people who know what picante sauce is supposed to taste like."

Watch it here.

While the huge vacation rental management companies want to convince property owners that they can manage every home just right, even though they are located hundreds of thousands of miles away, the truth is - they can not.

One of these giant companies even has over 300 negative complaints and reviews online about shoddy housekeeping and lack of response. The average for vacation rental managers is zero, one or two over time. Something is seriously wrong with having 300 unhappy guests, because that means there are far more who don't take the time to post complaints.

For another competitor, their complaints reveal a wolf in sheep's clothing. Although they profess to be managers, they quickly throw owners and managers under the bus whenever there are any complications, as the following complaint answer proves:

COMPLAINT: "2 days before my trip receiving a voice and email telling me that my reservation had been cancelled because of a double booking."

ANSWER: "Booking was canceled within 48 hours prior to her arrival when it became apparent to the Host that there was a conflict with a previous client who'd booked."

And then they accidentally revealed the wrong problem, (our company) "The Host (homeowner) is the party responsible for resolving any conflicts. [Our company] is a marketing and booking service that Hosts use to assist with reservations. . . The rental agreement. You accepted . . . Clearly states that the booking is directly between the Guest and the Host."

And then they reveal the unreliability of their services by saying "Double bookings are an unfortunate side effects of the vacation rental and travel industry as a whole."

Well, duh, no that is not correct. That is excuse making

Although no one is perfect in the lodging industry, double bookings are NOT common and they are certainly not an unfortunate side effect. They are the result of a company pretending to be a lodging manager when they are, in fact, too far away and too powerless.


Vacation Rental Firms have proven to be a locally branded business. Owners and guests prefer to deal with a local reliable professional firm that is on hand to attend to them. Members of the Vortex Organization have found the best way to do that.

They are independently operated to ensure great houses, hospitality cleaning, happy guests and happy owners. Our first office opened in 1964, but we are the most tech-enabled managers. We are in it for the long haul..

But the network ensures that managers have all the tools such as dynamic pricing, post listings on hundreds of advertising websites, and answer guest inquiries 24/7. In fact, local firms have access to local tourism promotion, websites and contacts the others can not match.

That means our managers produce more bookings as well as more peace of mind.

So if the vacation rental "manager" you are using to book your home is not actually located in the area where you rental home is situated, or even in "New York City", its time to go local.

Call a local professional vacation rental management company to learn about all the comprehensive and reliable services you have been missing.

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And a few more just for fun:

1989 Pace Picante Sauce

1990 Pace Picante Sauce

1993 Pace Picante Sauce

1993 Pace Picante Sauce

1994 Pace Picante Sauce

1995 Pace Picante Sauce

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Author: Wm. May, Vortex Managers
Blog #: 0530 – 09/01/17

Hire a Crack Head to Clean your Home

By William May
Published: 03/01/17 Topics: Housekeeping, Vacation Rentals Comments: 0

"Hiring cheaper housekeepers is no problem", said the property owner. That way they can make more money.

"I mean how hard can it be to clean my little 3-bedroom 2,000 square foot house?"

Do you mean clean it any day of the week including weekends? Be on-call for special cleaning? Always show up on time and never complain? Be willing to do extra cleaning, and without notice, when some guests leave a terrible mess?

Do you mean a cleaner who has lots of family and friends to back her up when she gets busy with other things and decides she can't work on a day you have a back-to-back? Or when a child is ill or a car breaks down?

Some owners want to believe there are many people just begging to clean their homes. Unfortunately, there are not. Worse yet, most of them don’t pass a background check. They don't have references. They don’t want to take training. They detest checklists.

These cleaners don’t stick around when things get too busy and they never clean at high hospitality standards. They do not clean sufficiently and they are not there when you need them the most.

Let us all be honest, not all job applicants will be dedicated to our industry. There is no glamour unless they work for a desirable company that treats them well.

Many applicants just want a quick buck to pay for their drug habit. This is more common than you might imagine. The homeowner may never know until the druggie goes missing along with assets from their home.

If you are paying your cleaner in cash, do beware that it's illegal and your money may be just feeding a habit.

Professional management firms must protect their reputation with guests as well as owners. They want to pay their staff a good working wage. They want to be fair, kind, and responsible employers. They need workers who are reliable, loyal and competent. They do background checks and they have extra staff for backup.

Of course, these things are just good business, but they are also the only way to provide hospitality grade cleaning - the kind that discerning travelers expect at every lodging establishment from four-star hotels to cottages in the woods.

"Oh, but if you can’t clean the house cheaply, it will drive away guests," said that owner.

It's actually the opposite that's true. Guests are not stupid, they understand that no one can clean homes for a measly amount. One guest enunciates what some owners refuse to acknowledge;

"Your home was amazingly clean. But last year I rented a beautiful new home from another manager and the place was disgustingly dirty. I should have known better - no one can clean a whole house as cheap as they charged."

Yes, and every owner should understand the basic formula for requiring professional and thorough cleaning. With the advent of the internet, guests now have a global platform to report unclean homes. One bad review can lose thousands, even tens of thousands of dollars in lost bookings.

Why risk that? The math is simple. Hiring great housekeepers, paying them well, rewarding them with praise and thanks is good for business. It's even greater for maximizing income while minimizing problems.

Still not a believer? Here is the challenge - after the next few departures, do your own cleaning.

Arrive to clean exactly on time and then wait while the guests loiters and leaves late, knowing that the incoming guests while inevitability show up early, and expect the house to be sparkling clean even before their scheduled arrival time.

Of course, you must chit chat and make nice with every guest, or they'll make nasty comments to your boss, even though they were not supposed to be inside yet.

To clean well, get your hands down deep into and behind the toilet, scrub your knuckles off in the shower, get on your hands and knees to scrub the kitchen and bathroom floors. Wash stacks of dishes, pots, and pans with gobs of dried on food.

Wash loads of towels and linens. Be sure to treat any of those unmentionable stains. Make every bed perfectly and plump every pillow. You'll just love trying to put on comforters on bunk beds. It is not impossible, but you won't enjoy it.

While you are at it, clean up the dog poop in the yard, or shovel the walkway of snow in the winter. Scrub that meat-encrusted barbecue until the brush breaks. Sweep the leaves from the porch.

Don't forget to check every light bulb, vacuum every square inch of every floor, and catch every cobweb or your boss will scold you like a child.

Do all this in the shortest number of hours because some owners out there want you to work cheap while treating you like an indentured servant.

After you do your own cleaning, the light will come on. You will want to pay cleaners more, you'll treat them better and you'll make more money because happy housekeepers make happy hospitality grade clean homes!

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Author: William May – Volunteer, Vacation Rental Association
Blog #: 0583 – 03/01/17

Extortion and Anti-Disparagement Defense

By Ron Lee
Published: 01/17/17 Topics: Vacation Rentals Comments: 0

Attorneys are supposed to be advocates. journalists are not.

Consumers want to believe that Freedom of the Press gives them permission to say anything and everything they can dream up. However trained Journalists know that fair and balanced reporting is a prime requirement of retaining that freedom.

Yes anyone can publish anything they want without prior restraint from government. But print and broadcast publishers employ tight editorial oversight and fact-checking, along with constant legal review, to avoid being accused of non-factual reporting.

Publishing false or unproven articles can be very expensive for publishers who fail to do their homework, and defamed people will take them to court which is costly and bad for the journalists resume.

Consumers do not care about their reputations because they can often publish anonymously. Some could care less about fairness, blatantly using extortion and now with the help of Elliott.

So when a writer outwardly proclaims he is an advocate for consumers, every word they write must is subject to disbelief. Christopher Elliott's recent article about the contracts that lodging Property's employ to avoid extortion is an egregious.

In a recent article, Elliott incorrectly mixes un-investigated consumer complaints with his own prejudice to conclude that lodging operators should not prohibit consumers from having an unquestioned right to defame Vacation Rentals.

Any ethical journalist would dig in and do the work to at least pretend to examine both sides of the issues.

Many consumers have figured out the game - how to threaten lodging operators with world-wide defamation - and all to get any and every concession their selfish minds can dream up and even for invalid reasons.

Every business has the ability to sue the other in court but doing so is expensive no matter how just their cause. With reviews, the matters appear small but the advent of the internet can results in massive catastrophic consequences for properties even when they are, in no way at default.

So what is a well-run property to do about consumers who extort them with false and misleading reviews?

The use of anti-defamation clauses, or the out-right prohibition of reviews, is just one way that businesses can protect themselves from unscrupulous consumers. Used sparingly and only when consumers are in the wrong and threatening extortion - employing what are essentially confidentiality clauses is just common sense.

Of course nothing protects properties from journalists who make a living by always siding with one party without knowing how to investigate the facts.

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Author: Ron Lee – Volunteer, Vacation Rental Association
Blog #: 0482 – 01/17/17

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