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In This Issue:
Visual
Data
Systems Seminar
Wilmington NC
September 22
About Us
Visual Data Systems is a leader in Internet marketing,
technology consulting and World Wide Web design. As a pioneer in Internet
business, we've logged more than a decade of achieving customer satisfaction
and Internet innovation.
Visual Data Systems offers a wide variety of products
and services that can be customized to fit your unique business needs.
Let our experienced professionals polish your ideas and dreams to create
your distinctive Internet presence.
At Visual Data Systems, there are no barriers. Just Innovations.
News & Events
Catch Visual Data Systems at the upcoming Conferences:
RMS Users Conference Wilmington, NC, September
22-24
Vacation Rental Managers Association (VRMA) National
Orlando, Florida October 11th - 15th
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February
2003 • Volume 1, Issue 1
Web Technology: Opportunity with a Dark Side
By George Volsky
 Use
web technology wisely; don't let anyone come between you and your customers.
Web technology is dramatically changing the vacation rental industry.
Your business needs a web site. It can improve customer communication.
Your web site should have a discount page. It can be your best marketing
tool. Web vendors are promising you more reservations and new revenues.
But be cautious what you do and whom you do it with. Evaluate every Internet
opportunity against this business fundamental rule: "Never allow anyone
to come between you and your customer."
A Computer In Every Rental Unit. Railey Mountain Lake Vacations
of Deep Creek Lake, Md., puts a computer in every rental unit. The computer
opens to a third-party web site rather than Railey's. A Railey renter
can order groceries, reserve an all-terrain vehicle, sign up for a fly-fishing
trip, or book a boat. The web site offers participating vendors free reservation
software, which makes them happy to pay a commission on every booking.
This is a sound concept. Businessmen can stay in touch with the office.
Computers are better than docks in keeping children occupied and happy.
But, be careful. Eventually you may want to use the rental home computers
to communicate with the renter, conduct renter surveys, or implement concierge
services. You will want to protect your renters from unreliable vendors.
If you supply computers yourself, you may find more problems than benefits.
If you use the first web vendor that asks for your business, you may sign
away important financial opportunities. Computer administration has a
steep, expensive learning curve. If interested, you may want to check
first with Railey co-owner Zack Taylor (301) 387-5533.
24-Hour Live Assistance for Web Surfers. One company is developing
a 24-hour "Live assistance" service for on-line booking customers. The
renter enters his phone number and waits to be phoned by a live operator.
This is a novel idea. Its value will ultimately depend upon the calling
center's price, response time, and familiarity with inventory of multiple
property managers. To evaluate such a service, ask to speak with rental
managers who have tested it.
After-Hours Emergency Calls. One company offers to answer after-hours
emergency calls. This could protect your employees against annoying late-night
calls that don't require immediate response. But this puts a third party
between your company and its customers. Since after-hours callers believe
they have an urgent need, you risk losing unhappy customers. The service
provider also can accumulate a commercially valuable database regarding
your service requests. It is unclear whether this service could justify
its cost by generating new income or reducing costs.
Web-Page Discounts May Not Produce More Rents. If your homeowner
wants more rentals, your web discount page can generate them. Just drop
the rent. This is great for the homeowner who wants more rentals. But
watch out! What if your discount doesn't produce a new renter but merely
diverts one from a neighbor? You make one homeowner happy by cannibalizing
another. Your company and homeowners make less money. Monitor this carefully.
Survey your discount renters. Ask what they would have done without the
discount.
Using Web Discounts To Generate New Rentals or Divert Renters From
Competitors. Good luck. Few drive-to markets can attract new renters
to their resort area by the mere act of discounting rents on a web site.
You are more likely to divert renters from your own program. To divert
your competitor's renters, you may have to discount all units across the
board. But be careful. During 2002, across-the-board discounts initiated
a discount war on Hatteras Island, N.C., where peak-season rents fell
as much as 40%.
Web Portals Bring Few Benefits. A number of vendors promise to
increase your off-peak rentals by booking your inventory through their
web portal. A very worthy goal. But web portals seldom fulfill their promise
of more rentals. Except for some fly-to markets and ski resorts, vacationers
don't usually select a vacation destination based upon the rental inventory
offered on a web portal. Web portals rarely benefit mainstream vacation
rental managers.
Web Portals Pose New Dangers. Most web portals reserve the right
to list your competitors' properties along side yours. They often strip
the property manager's name from advertised units until after the renter
books. A web surfer won't know your rental units from your competitors'.
Renters will make their selection based on features and price, ignoring
any service advantages your company may have. This electronic marketplace
strips away good will and customer loyalty you built up over the years.
It pushes rents down.
Web Portals Where "Renters Pay the Fee." Most of you won't pay
web portals a fee to book a peak-season rental you can book on your own.
So some web portals now offer to take their fee directly from the renter.
In theory this costs you nothing. In practice, these web portals encourage
you to list units at a discounted rent. Either way, you get less rental
income.
Can You Really Quit A Web Portal At Any Time? You may think so.
But what if your competitor puts all of its inventory on the web portal
at discounted prices? It won't take your customers long to discover how
to bargain shop. If you back out, your renters may continue to use the
site to get your competitor's discount prices. You may find that you cannot
afford to withdraw your inventory from the web portal you helped establish.
Discounts then become the rule.
Summary. The Internet technology raised hopes for a "new economy."
Today, most of those dreams are in ashes. Those web businesses that have
survived are those that bring lower prices to the consumer (travel, electronics,
mortgage rates, insurance, and retail goods). Repeat renters are the lifeblood
of your business. Happy homeowners are a source of your company's growth.
It takes much effort to build a good customer relationship. It's so easy
to destroy that relationship. Be cautious before allowing a third party
to come between you and your customer.
About the Author: George Volsky has contributed this article.
George Volsky is one of the Vacation Rental industry's leading analysts
and consultants; George regularly provides seminars at Vacation Rental
Manager Association (VRMA) and software user conferences. He closely follows
consolidation, and regularly works with this industry's vendors, helping
Vacation Property Managers develop and evaluate competitive strategies.
George may be contacted via email at viking6@mindspring.com.
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