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Link to the bloomberg article (it is behind a payroll, unfortunately…)
Transcripts may contain a few typos. I work alone and publish daily, so it is hard to catch all typos. Enjoy!
Reacting to Bloomberg’s Article, Is the Airbnb Dream Dead Transcript
(00:00):
Hey everybody, it’s John from Vacation Rentals with John. Thanks for joining me again today. Today’s gonna be a reaction episode to two pieces of news that came out yesterday on Bloomberg. And as much as I try to stay away from mainstream news media because of its, you know, capacity to scare you and put fear on you every single second this one was about Airbnb, so I thought it would be a good idea to, you know, read over it, do some research and share with everyone what’s going on with Bloomberg. So the title of it was, is the Airbnb Dream Debt. And it talked about a couple that purchased, they were from Minnesota, they purchased in Orlando by Disney, my main market, and how they received no bookings in August. It’s been nothing but a nightmare losing money month after month, and they’re just really upset about the whole thing.
(00:54):
Well, <laugh>, I don’t know, like if you have really out of touch real estate speculation and you think it’s, you know, a viable strategy for running a business, well, you kind of get what you deserve. Not in too harsh of terms, but in any business, let’s just get off of the topic of vacation rentals just for two seconds. When you start a business, one of the main questions is, where am I going to find my customers? How am I going to get people to buy? Right? And any sales organization would ask the same questions. So starting a business and speculating, thinking that another company, namely Airbnb, it’s going to just throw bookings at you without you having to do much, and it’s going to be totally passive and it’s, everything’s gonna be fine and dandy. You’re gonna make money. That’s not a great idea. And unfortunately, last year a lot of people bought into this short term rental business with that exact same mindset, just thinking that they were gonna scoop up some property and they were just gonna list it and money’s just gonna come rolling in.
(01:54):
We’ve already talked this to death in previous podcasts, but this is actually a point of normalization. And now that people are actually saying, holy smokes, like I’m losing my shirt, it’s actually going to normalize the market because a lot of people will actually exit, especially in those super, super high supply markets where there’s just too many homes and the demand is just not there. People will either convert to midterm, convert to long term, or just outright sell the property out of frustration. And that’s a good thing because the more people who exit this business, the better it is for the existing entrepreneurs who are going to go all in and stick with it and ride it out. And if you’re like me, you’re going to stick with any business even when it’s doing bad, and ride it out because we expect highs and lows. So this business is no different. This is going to have highs and lows, and this year’s particularly low. But as long as we’re doing the business fundamentals properly and marketing our own property and not relying on someone else to bring us customers, everything will pan out fine and we’ll keep growing our businesses.
(02:58):
So you, we have to ask ourselves that. Like, if Airbnb were to go poof, just go away tomorrow, where and how would we market our property? Like if we’re just relying on the platform, that’s not a winning strategy. And I know they dominate search. I know on Google, they’re the big kahuna and everything is Airbnb when you Google vacation rentals in my area. But there’s other platforms that’s one. And there’s this capacity to actually market your own property to friends, family, your email list, your your personal and professional network. Social media’s a big one. Mailing email list, there’s tons of ways to market your property. You could contact realtors, real estate brokers who specialize in travel. Travel agencies love to sell properties because they earn a commission on it. So there’s different ways you can distribute your listing instead of just relying on Airbnb completely, because look at it like a soup.
(03:54):
You have ingredients in a soup. The soup gets richer and richer as you put more ingredients in it. Sometimes it won’t taste bad, but that’s beside the point. When you add all of your bookings together, you want some from Airbnb, you want a couple from vrbo, you want a couple from booking.com, you want a couple from your friends and family, you want a couple bookings from your professional network and a couple of bookings from your email list. And overall, that will come up to 80, 90% occupancy for most people because you’re, you’re driving traffic and you’re generating bookings from lots of different sources. But if you’re relying on one or even two main sources, yes, that can get you by and that may help you break even. But in the tough times, you need to expect to lose money if you’re not actively marketing your property.
(04:38):
Now, if you’re actively marketing your property, you stand a way better chance of actually turning a profit and making money. In my vacation rental businesses, I mainly market to host than I, I offer services to help them run thriving businesses. But I can’t rely on Airbnb to promote for me, because if I wait for Airbnb to do promotion for me, one, it’s against their terms and conditions. I get kicked right off of there if I try to mark the host on there. But two, I, I’d have no customers. I’d be flat broke if I just relied on another platform to bring me leads because that’s just not how things work. Like any thriving business has different ways of generating leads and generating those leads turns into bookings, it turns into gas. But this business is very lazy because yeah, we have to do the operations and we have to clean the, the unit and we have to inspect the unit and we have to furnish it and do all these hands-on things.
(05:30):
But when it comes to looking for leads in the selling part, people forget that we are responsible for selling and marketing like that is what a rainmaker does. You need to sell and market your own property, but if you’re relying on a platform to do it for you, I mean, that’s why the times are not good. It’s because we’re just waiting for someone to bring us leads. And that’s why Airbnb makes so much money because they’re bringing leads for lots of people. They’re the lead maker, they’re bringing in the money, right? So at the same time, while we can be frustrated with the platforms, if you’re fully relying on the platform to bring leads, well it’s time to think differently and kind of come up with a different strategy that’s actually gonna have compounding effects over time. If you just say, Hey, this isn’t working for me, you know, I’m not making as much money as I used to.
(06:16):
Airbnb’s not what it used to be, you know, I don’t know what I’m gonna do. That’s the wrong mindset here. We need to look at things objectively. Airbnb’s not bringing as many bookings as it used to. Nightly rates are trending downwards. How can I get my property in front of more people and more audiences so I can promote my property to win more bookings? That’s the correct mindset. So once we find out that we’re in the right head space, we can actually distribute the property to different channels to actually get more bookings into our vacation rental. Start really personal if you’ve worked with a realtor or a broker, we have friends and family that travel, ask them to share your property with others. It’s a really great way to get your property in front of people for free. If you haven’t asked people to promote you yet.
(07:01):
You know, I know it sounds like a shameless marketing thing, you don’t want to annoy people, but trust me, if you’re trying to sell and you’re trying to win, you know, you’re not annoying anyone. You can give them rewards. Like anytime you get a booking, you could offer that person some sort of commission or a thank you gift, but you can’t be afraid of promoting your property to your own network because your own network is so powerful. Think of all the people you met in, in school, in university, and all of your jobs and parenting groups and groups. Like if your kids do sports, those groups Facebook groups, there’s so many ways that you could get your property in front of others that don’t cost anything. It just costs your time and it turns into real bookings. And that’s real money, right? So actually promoting and selling your property and not relying on the platform, I guarantee you, you could get three or four bookings each year that’s more bookings than you had without doing it.
(07:53):
If you’re saying, gee, John, you know, why didn’t I think of that? I knew that. Like everybody knows you could just tell people about it. Well, are you doing it right? If if you’re not doing it and you just know about it, but you’re not applying it, yeah, then you’re, you’re not gonna have as many bookings as someone who’s more sales oriented and marketing oriented because you best believe that they are doing it. And that’s why their calendars are more full. The best operators I know, they get bookings from all over the place and they’re not relying on one platform. The people I know who are losing money, they’re just trying to do one platform and all their bookings come off of there. And anytime something changes, there’s a Airbnb policy change, there’s an issue with guests and they don’t, it doesn’t go the owner’s way.
(08:38):
They’re complaining, whining and moaning on, on Facebook about it. So you have to take charge of this. And it’s not just opening a book direct website, like that’s one thing you can do, but it’s more looking at this as your business. This is your vacation rental and you’ll do what it takes to market vacation rental by any means necessary to get your property in front of more eyes. Because the more eyes, it’s a numbers game, the more people you get in front of, the more potential bookings you have and the more money you’re going to make over the course of your vacation rental career. So it’s changing that mindset, shifting it from that victim mentality that, you know, not what it used to be to, Hey, I’m an entrepreneur, I’m in charge of my vacation rental business. I can actually make a difference if I promote my property and not just wait for inbound leads from Airbnb.
(09:25):
So I hope this was helpful. I know some people may take this the wrong way, but I think it has to be said, especially since there’s so many articles coming out about Airbnb’s dying, Airbnb busts, what am I gonna do? I’m not making any money. You know, like that’s victim mentality and we are not victims here. We are winners. And in this business, you’re gonna have winners, you’re gonna have some vacation rentals and people who lose. But that is not us on this show because we are constantly teaching ourselves how to be better. We’re constantly improving. And if we’re just getting 1% better each day, that has a compounding effect. So if we can find out what works for our specific rental in terms of marketing mix and, and sales and follow up and email marketing and on page design for direct booking websites, we do everything.
(10:10):
The business will thrive and you can scale. You don’t just need one vacation rental because you can add properties if you’re succeeding at it, because you could just do more of what got you this success for your first property. So this business now more than ever, it’s a great time to be in it. Just because rental rates are slow doesn’t mean it’s a bad time to be in this business. It just means that you have to work just a little bit harder to have your place be full. We all want no vacancies. So having no vacancies, we have to constantly be promoting, constantly be selling, always be closing with my own rentals. I definitely need to do more of it. Because you can never do enough. And yeah, like 75% of my bookings come off Airbnb, right? So I, most of my bookings are coming off the platform, but I’m still striving to get that other quarter, that other quarter of my booking mix to be bigger, a bigger proportion of my total booking mix.
(11:05):
I don’t want to rely on any platform. And if it takes a couple of years to get, you know, a a hundred percent book direct, that’s what I want. And I know we can do it. If anybody says it can’t be done, I’m gonna prove them wrong. Okay? And I hope you’re coming with me for that ride because we can do it together and we can share these thoughts on the Facebook group and we can connect because the more we come together, the more knowledge we can share and that knowledge can be applied and that’s how our businesses will grow. So if you haven’t joined a Facebook group yet, I’ll include a link to it in the show notes and I’m looking forward to doing this more frequently. So if you have any content ideas shared in the Facebook group, send me an email that will be in the show notes as well. I’m looking forward to it. So with that being said, thanks for tuning in today, friends, y’all take care.
Vacation Rentals With John is one of the fastest growing short term rental podcasts. The show has been growing in popularity because of its no BS, to the point lessons on how to grow and operate a vacation rental. Join the facebook group. To listen to any of the past episodes, check out this page.