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“My bookings are down!” Is there an Airbnbust coming?

If you run an accommodation, you’ve probably heard this line in recent months. Or maybe you’ve even said it yourself. The sentiment was captured in this viral tweet that popularized the term #Airbnbust, referring to a perceived decline in the popularity and feasibility of short-term rentals.

It’s more complicated than that, though.

On Nov. 1, Airbnb announced that Q3 2022 was its most profitable fiscal quarter ever. And AirDNA’s data shows that both demand and revenue for short-term rentals are currently at historic highs.

So then why are so many hosts seeing year-over-year declines? And are those declines actually a sign of a long-term booking problem?

Don’t worry—we have the answers you’re looking for. Today’s guest Dennis Goedheid, CEO of Casiola has been in the biz since Airbnb started. He has been there, he has done that, and has conquered this space. Dennis joins me on this episode to share insider secrets for increasing your visibility as well as practical steps you can take to bolster your bookings today, whether you’re feeling the bust or not.

What we cover in this episode:

  • Key elements of a hospitality brand, and how branding informs every decision you make.
  • The main reason some short-term rental owners are experiencing a rough patch.
  • How to beat the “Airbnbbust”.
  • Tools to help you make data-driven decisions.
  • What you can do to prepare.
  • How will 2023 play out?

 

Founder and CEO of Casiola vacation homes and Guestor vacation rental investment fund, Dennis Goedheid is an accomplished Entrepreneur specializing in technology, marketing, real estate, investments, and company culture. He is an expert in events management, property management, and real estate with extensive experience in public speaking and organizational growth.

This episode punches above its weight, not just for the golden tips of increasing your bookings but thinking out of the box when dealing with the many challenges in our industry.

I hope you find this episode as insightful as I did!

👓   Watch the episode here
📣   Listen to the episode here

Transcription:

Hello, and welcome back to The Accommodation Show. We help accommodation owners like you get the knowledge and skills you need to grow your business, improve your guest’s experience and increase your profitability.

Bart: Okay, everybody, welcome back to another episode of The Accommodation Show. Welcome to the show, Dennis. 

Dennis: Thank you. 

Bart: I’m super pumped to have you on the show. You’re representing Casiola, which is an awesome short-term rental company in Orlando. I know they’re doing fantastic things we met at the vrma conference. Before we get going, I would love you to introduce the company. Introduce yourself in your name, and I know that your name and surname is just as complicated as mine. So I’m Bartek. Tell everybody a little bit about your business and clear up the name for us.

Dennis: Yeah, so the original Dutch pronunciation of my last name is Goedheid. And it’s actually the literal translation of the word goodness in Dutch. So my name is Dennis  Goodness. I am the founder and CEO of Casiola Vacation Homes and we are a full-service property management company. And we manage homes in Orlando, as you mentioned, but also in Aruba. And since last month, also in Miami,

Bart: And how big is the business and how long have you guys been doing what you are doing?

Dennis: So we started in 2014 basically it was just me and my wife in the beginning. We acquired a small existing business with 25 properties all in one resort. Right now we manage around 350 properties over in those destinations.

Bart: Wow. And look, I saw you at the VRMA. And so you know. Actually no, I met you at The Book Direct Show, that is where I met you. And then and I didn’t forget you because of your branding. I remember talking to a friend and they say of course I know Casiola because of the pink shirts. Yeah. So I love the branding part. And for anyone that’s listening, if you want to see things done really well from a branding and marketing perspective. From my point of view, you’re definitely in the top tier. 

So have a look at their website. Have a look at what they’re doing. Today’s episode though, before I get too far into branding and marketing and all of that. I really want to cover Airbnbust, which is coming. Because I think that it’s an important topic. It’s a topic that a lot of people will be worrying about. What are we going to do if bookings slowed down? What are we going to do? If we can’t rely just on one channel? What are we going to do if interest rates keep rising and our obligations to banks, keep rising? What is going to happen? In a recessionary environment? And from Dennis’s perspective? Because we were talking before? How is Casiola thinking about this? And are they preparing for a potential downturn in the market? So that’s what we’re covering today. Tell me just before we’ll go back to that topic. But just before we do, just the branding part, tell me about the colours and your thinking behind your branding.

Dennis: So it’s funny that you mentioned that because in either our colour is probably what stands out most of the brand, a lot of people remember those pink shirts and obviously it’s not magenta, but they remember the colour they don’t remember me or my name or the company name, but they do remember the colour and it actually started when I was getting ready to move to the US and looking to start into property management. I did some market research and one of the things I did is I searched online for every competitor in the Orlando area that I could find and I copy and paste all their logos on one big sheet just for me to have a visual. And when we started creating our logo, I picked the exact opposite of the colours of all these other logos.

So I picked a colour that no one else had was the standout competition. And that happened to be pink and I thought okay, it’s probably also it’s not a very feminine thing. It’s something that stands out it’s a little bit harder. But it also attracts the women that are doing most of the planning, business trips, where we started in Orlando, so I think it really really worked well. And in the beginning, it wasn’t as prominent as it is right now. When I went to conferences or events I was suiting up and wearing a tie and up until one day someone came to me at other conferences, you know, I remember you from another event where I didn’t have the time to change and I was just wearing my poll that you see here that they like oh my god this colour is actually so strong and that was the last time ever for a company. So from now on, doesn’t matter where you’re going to see me or the rest of the team. We are always going to be very close. Close and the same with our vans that are brand new with our signs everywhere you see a mile away, and it’s such a strong part of the brand.

Bart: I absolutely love the story and it makes so much sense. I love how you came to the conclusions that you came to. It wasn’t like with this vision that I’m going to wear these shirts at a conference that kind of came later but it’s sort of that iterating on what you’re doing and going hog head and when I wear suits if I wear the shirt I’m going to get far more traction and exposure just to finish this one off. Tell me the assets in your properties. So the title of the brand from I guess social media people aspiring and they jump onto the website and then they’ve got the same colours and the same theme when they get to the property. I’m not talking about digital I’m talking about naturally on-site marketing. What do you have in the properties?

Dennis: So again pink is such a strong colour so our signage really stands out. We have stickers, for example, the AC with the five temperatures too low or too high. We have cool signs we have barbecue signs we have to keep those close signs all those different signs are circling a little bit like what you see here but smaller and when you just stand in the property and you look around you’ll love the property they do not see that it’s not part of the property, that it’s signage. With the brands and of course, we also have brochures and home dates. This, also adds something extra but you should really see the property without the two branches. We’re not going to have light pink bedspreads or pretty so both of the properties. Try to do it just enough that you know that you have Casiola property.

Bart: I love it. I love it. And look I decided to do this to fo folks. This is a topic that we’re gonna go back to and explore in-depth, branding, marketing scaling a business and what Casiola are doing some of these fundamentals we will take away so mark my words that episode will come but today, which I think is more important is we’re going to switch back to this I’m sorry to switch back to what’s happening right now. Where we’re getting to a stage where there’s a lot more risk coming into this particular industry. There’s been a huge amount of scaling around us and a lot of competition coming into the market. And there’s been an Airbnbbust terminology or hashtag that sort of coming up and people are starting to really worry. So from people kind of worrying is it a concept here now it’s in their faces and the media is picking up on it and going alright, what are the consequences going to be? Let’s start off with their one. Have you heard of the Airbnbbust coming? And what are your thoughts?

Dennis: There is a lot of thought about that. Of course, definitely heard about this. Now, on the other side. We have been using Airbnb almost all the way from the beginning. When they were not popular at all It started out as a really small channel for us, but it always did really well. So from the beginning, we have been very active on Airbnb. And I think a big part of our growth I’m gonna be honest, is thanks to Airbnb. When I just started we were the only management company. At the resort we were managing homes that were on Airbnb, no one else will have listings on it and then as they keep growing with them because we have so much on demand and then of course later on everybody else starts to get on.

But what we have seen in the last few years on Airbnb and in short-term rental space, in general, is almost like a classic bubble. Too many people have gotten into the space at the same time. In a crazy real estate markets. Very cheap money. So there is absolutely an oversupply right now. I also think there’s a lot more awareness of space and vacation rentals in general, thanks to the pandemic’s effects on Arab republics. They’ve done an amazing job with people that never stayed in short-term rentals and were what we do but I think too many people go there. Probably not the best time from an investment standpoint and then you also have played on rental arbitrage is that still the dream to become a millionaire in a few months without using your own money? We call like passive income. Everybody in the space knows that short-term rentals are everything except for passive income. So but it’s nice to have a pool where you can make millions without having to do anything without using your own money and for that created a lot of money, space, and many spaces or locations and oversupply.

Bart: And look, you’ve touched on so many fantastic points and that’s where I had to get a piece of paper and started writing them down so I don’t forget them. And I come back to them. Because there are two things I want to talk about we definitely want to talk about what Casiola is doing and what you’re thinking at this stage and that’s what this show is all about sharing, sharing what you’re doing so that then you can learn from other people as to what they’re doing so that we can all get better during these circumstances. There’s another thing that I want to point out for those that are listening this Airbnb last is not we’re not just talking about Airbnb as well. There’s also isn’t a general slowdown in the market to saying hey, if you didn’t get into a recession, then there’s the traveler demographic and the demand is going to change. 

So we have to deal with that and figure out who’s still traveling, who’s not going to be traveling anymore, and what we’re going to do with those people that are traveling, and then what do we do with the supply of stock that we can’t fill? So if you’re in a hotel or a motel, this conversation is also pertinent to you. And it might just apply a little bit differently depending on what you actually have to offer. The oversupply heart I really want to talk about that and this will go back to this is probably more short-term rentals, and hotels as well, but I don’t want to talk about it now. I remember I think it was towards the end of the pandemic that Brian Chesky was saying, our biggest issue is that we need more properties. We need more properties. We need more properties on the platform. And from those numbers that he was quoting it feels like it felt like he needed an endless supply of properties forever. And because he would fill them, has that changed?

Dennis: Well, I think there are two things in general as a space, I think we’re a lot bigger than pre-COVID Scapy are sessions with a lot of people, especially the one that recently did not realize that the last two years have been exceptional. There has been so much pent-up demand. And a lot of these people got a lot of money during the pandemic with stimulus checks, and unemployment, it is more money than they would have had when they were working. But on top of that, they also had a lot of times, especially in 2021 so it almost created the perfect storm and Brian from Airbnb was probably right at that time when the pandemic hits. Yeah, everybody can see and of course, most of these homes were sitting empty in your area. Then also a few months we saw that, like coastal markets and mountain markets where you don’t have a lot of people around. We’re really killing it. 

So everybody wanted to get out of their house, but they didn’t want to go to the Sydney Harbour location or to Orlando for that matter. For with hundreds of 1000s of other people. So those markets really exploded early often in the first few months of the pandemic. So then after that people have like, Hey, I’ve been to the beach in the mountains and I want to go back to locations where there are other people so we have seen in Orlando, like Monster or almost a year that we’ve never seen before you probably also heard about this, raising prices like every few months, complaining about too expensive, and I agree with them but the reality is, there’s still a two-hour wait line for every single ride even Indian slow on flights over so they are raising prices because they want every guest experience in mind to experience so there is such a big demand as well on international travel for clothes or wire for us. So all those people are finally able to travel again. So they all came into the space and for all of our short-term rental operators that had been there in reference because they started recently so they think, Hey, this is what it’s always going to be. 

Now it is going to slow down of course, but I still think that we’re gonna be able to do the overall level unless it really goes that drain with the session fairings or war or whatever that’s that’s something else. But if everything else stays relatively stable, I think we can go back to those levels of occupancy. Still think that ADRs will be higher because of inflation and property owners are probably gonna get out of the market. Next month or years or so, the market is gonna stabilize for a while.

Bart: That’s an interesting one. You sit there and think that we’ll go back to 2019 levels of occupancy. But what we’re also seeing though, is that there is potentially an oversupply of property. So either some of that property is going to need that to fall out of the market, and the prices might get driven down. And you’d imagine that you wouldn’t have more demand than you would have back in 2019. So the supply of customers is what I’m saying well guess is going to be maybe the same as what it was back there. You got an oversupply of properties. Is that what you’re thinking?

Dennis: Yeah, so it may be painful until we get to that collection. So there’s probably gonna be owners or property that are not going to make a lot of money, the more they’re gonna have to lower the prices and the pressure on everybody else. So we’re definitely gonna see correction there and it may take a while, but the market always corrects itself. We have seen that if you follow numbers from the pandemic in a matter of months. We saw the supply goes down with 10s of 1000s of homes every year to your area. 

So pretty quickly, all those properties are sitting empty. Owners have mortgages to pay so they just got a long-term debt. They also couldn’t because it will take some money than no money at all. And it’s not just the money coming in. You also have expenses, you need to pay your properties and so they just want to have as soon as they could, but then they saw like that demand rates going up. So back to the short-term rentals. And I think we’re gonna see something similar over the next few parks. From what I’ve seen here in the Orlando market, a lot of properties also got sold 4, 5, or 6 years ago. They saw a huge opportunity to double their investment in selling the property. And what is different from all the prior years is the sole model of self-managed so we didn’t lose quite a few work properties. I’m going to work with a property management company, and my house myself, probably because all the big dog channels, Facebook, and Instagram.

Everybody could fill up their property over the last few months, especially up until the summer. Just having a listing on Airbnb works with generators. But then off to the summer. We did see fewer slow-down areas and a lot of these owners started to panic. A lot of them were only on Airbnb, I think it was a channel of the beginning. Now they’re looking into other channels but a lot more complex to manage software to send listings, different systems to respond to guest inquiries, and different payment systems you need to get your prices. The next thing so what we see now is like they’re coming back to professional property managers like us because they help they’ve had some great months but now they just don’t know what to do anymore and they don’t have the time to do it because they have all their jobs with their main income is coming from so they need professional assistance from property managers. And I think that’s the first step. That the market is going to change and is probably going to see some owners going out in the future.

Bart: Yeah, so that sort of passive income dream that a lot of influencers have talked about, and there’s some in particular that I think of you know, the reality starts to bite, where hold on my place is empty for three months or six months and I just don’t know what to do apart from putting up another video saying hey, things aren’t going so well. Or pretending that everything’s okay when it’s actually not. And then you go back in. Alright, cool. I’ll go to get that professionally. Maybe, maybe they’ll save it. One thing that I’ve got, which is a question which I’ve got, which is interesting is where are your 350 properties. You have better visibility over what’s going on across one market or several markets and you can see passes quicker than others can. For those that don’t know you’ve got tools like air, DNA, air, DNA and transparent that will give you more visibility over data to make some decisions as to what you need to do. 

What Casiola might find is that there’s a 10 percentile of properties that just aren’t performing well. And then you can actually figure out whether it’s an issue with the property, whether it’s an issue with your marketing, whether it’s an issue with the market overall. So you’ve got that visibility, but as an individual owner, you might not know where your issues lie. Maybe it’s you’re onto a dud and you need to get rid of this thing and get it professionally managed as quickly as you can. Maybe you need to switch to a long-term rental. What does someone do if they’ve got one property or five properties they find that it’s not performing well enough? And of course, apart from coming to you and saying, Hey, what do I do? What would your tips be for those people in that category that aren’t sure what to do? And they’re hearing about this Airbnbbust they’re looking at their numbers going oh my god, I’m in trouble. Yeah, where are they in trouble? What do they do? How do they figure out what to do next?

Dennis: So I think it’s very important whether you’re small or large is looking at market data, as you mentioned, and there are many tools. One, you didn’t mention that we use log data because we don’t control markets. We may think that we do great, but if you look at the market, and you see that everybody else is at the higher occupancy or higher ADRs you actually have to realise that you’re losing money although you think that you’re doing great so we always look at the market slides out for the market, even if you compare yourself your own performance year over year that doesn’t tell the whole picture. For example, last year, August was very slow for us and this year has been so much better so we just look at those numbers. 

You may think like, Oh, we’re doing amazing, but we need to compare with the market because the rest of the market is at the same or higher level or at a higher APR. We need to adjust and make sure that we get to that same level. So my advice would look at numbers at the market, the data you have available to you mentioned or grades and so on in order to analyse that and other than that, there are still a lot of things that you cannot do by and it’s just the old school working in comparing. Comparing things, for example, if everybody’s at $100.03 $100, you’re not gonna see that in any of the tools that you mentioned, but it may be a big reason why your property is not the same thing with amenities, the same with photos and description. Now look, there are a lot of things that you can do besides price to optimise your listing, and joining promotions on Airbnb, and your other channels work really well. So it’s really labour-intensive to do all those things. And we have people that do this as a full-time job every single day testing trial photos and descriptions. They check all the boxes. And yeah, after a while you see each other and can apply that to other properties as an individual owner. You’re going to have to do that with your property and see what works and what doesn’t work.

Bart: Just before we move on, just want to get the name of the data tool that you sent in Could you spell it out for me? 

Dennis: Yeah, it’s the key data. So keydata.com

Bart: Folks, if you want to have a look at that tool the other two that I mentioned were Transparent and Airbdna and a lot of pricing tools like wheelhouse and price Labs also have concepts that you can look at, which can be quite useful to figure out how well you’re tracking. And like you said what you’re trying to do is you’re trying to find overall market trends and just see where you’re plotting, based on consumer demand that if consumer demand has dropped significantly, that you’ll know that could be the reason why you’re going wrong. But if demand has gone up, and you’re not filling then you’ve got a problem as opposed to the market. So just different things. You tried to make data-driven decisions. So you can figure out what’s going on. And if you were to sit down with a property manager like Casiola they would actually look at this stuff and know back to front what’s going on and give you some advice as to whether to get rid of it, stay with it, whatever, we’ll get them to manage it for you. So that’s the advantage of a property management company. 

So I’m conscious that we’re getting into the weeds and we’re getting into it towards the end of the episode. I do like to keep them a little bit shorter. But one of the things that I wanted to talk to you about is okay, so you would agree that’s that, that they were in a much riskier environment right now. And that you need to make some provisions as a business to make sure that you’re robust enough to survive. It’s kind of like COVID, right? We didn’t know what was going to happen. We need to do some things to make sure that our business is protected. What are you planning for that and to what are some of the different strategies that you’re thinking about right now that you might implement or that you are implementing? already?

Dennis: Yeah. So important, I think is that you are on all the big channels and not just one channel. Because when they did their updates last summer, with their special categories, I think a lot of us also felt that most of our homes are not that exceptional, they are not on the top of the mountain, or they’re not in a tree or on the roads and everything he has been really pushing those days which is probably great. That you have you ever been to a property where for everybody else, you get less visibility? So that shows that it’s so important I get to be on all their channels, and they may all go on the same route, of course, you have to be prepared for that and always do things to make your property stand out. 

But we always see trends in our channel mix. So one year it’s a certain channel that is really killing it. Like I mentioned for us when we just started in 2014 booking.com was actually our biggest channel and they just killed it with Airbnb due to the pandemic got up to I think, a scary 65% Lower bookings. It was actually so high that we just jacked up the rates on Airbnb. You don’t want any channel to be consistently over 35% of our channel mix, please. So one of the things that are working very well, lately is the booking.com 

One of the frustrations of a lot of property managers was the whole payment system, lots of declined credit cards, bookings, cancellations and so on. But at the beginning of this year, they introduced payments by booking.com and that basically solved all those issues that we had before, see now that we have a much better conversion than before. So now booking companies are actually taking over the market share that we’re using. The same thing with Marriott I know not everybody can get on Marriott. Marriott has been assembled very, very well for us on the market. So I would my advice would be always trying out. Channels focus on our top five channels because it also spends a lot of time on those channels, optimising them. It’s not good enough to just use a channel manager and publish them everywhere and then sit back and relax. To go into these things and optimise your channel. Make sure that all the boxes are checked for that specific channel that you’ve come to

One of the frustrations of the property managers system towards bookings, cancellations and so on, but at the beginning of this year, introduce payments by booking.com and that basically solved all those issues that we have before completely gone and we see now that we have a much better conversion than before. So now, commerce is actually taking over the market share that we’re using from Airbnb. Same thing with berries. I know not everybody can get on berries, but it has been assembled very, very well for us to have on the market. So I would my advice would be always to try out channels of refocusing on our top five channels because it’s also spent a lot of time on those channels optimising them. It’s not good enough to just use a channel manager and publish them everywhere and then sit back and relax, to go into those listings and optimise each channel. Make sure that all the boxes are checked for that specific channel that you’ve counted for that.

Our distribution manager. Yeah, I sometimes feel bad for her because we have those channels every single week. They come up with a new feature somewhere up in the box to click a new cancellation policy. And yeah, the PMS or channel managers are usually not quick enough to follow suit and need to go in and check those boxes like Airbnb for example 1000 views in the past few months so you can now mark it as ocean view or CPU or I don’t know what else they have, like five-six different options. While those are very important features check if your property has an ocean view or lake view and don’t check that box. Obviously, if someone else does check that box, they’re gonna get more bookings and you may have an amazing view just not sure what it is. So it’s something that never ends, you’ve done some work on them to keep yourself up to date about what’s going on. Earlier this week. We announced the winter release. So again, you’re going to have to go through all these announcements to award your property and on top of that, don’t be the last one to check that box. Make sure that the first one is because you just got to get more visibility and result in more bookings. And that’s for all the channel’s safety. Try as many channels as you can. And make sure that you really put the time and effort into promotions and extra visibility that they give you to perform better.

Bart: And there’s gonna be one final question. And I’d be remiss not to mention this one, direct bookings in his whole storm. Give it to me.

Dennis: Yeah. So I’m probably not the right person to ask this question to, because Orlando, and I mentioned this before in other sessions. We are very, very dependent on OTA bookings. Only 5% of our bookings here in Orlando are direct. Even with all the branding that we do the visibility to the website, and SEO. We spend a lot of money on a website, and email campaigns, and still, it’s only 5%. So even in times of recession, if there’s less demand, it’s also going to be hard to get bookings. But of course, customers that book with you every year, year after year and you can keep them waiting, that’s really gonna help you get through with them.

Coming up. So make sure that you guys have an amazing experience of throwing to London again next year. It’s a recurring destination that people would come back to every year. Don’t wait for it. Come up with promotions. Before you check out this year you get like an extra discount because once you have them locked in, they’re much less likely to cancel again to get from other channels, so do everything that you can to get those direct bookings but also know that it may be harder to get off the market.

Bart: I love it. Dennis. I’m not going to ask any more questions for today. I appreciate your time. I appreciate your insight. I appreciate your knowledge, you know like you really for there are not that many companies that have 350 properties. There are just so many property management companies but to get to the size that you are you should be super proud. And for us as an audience, it’s great to be able to get some insights and some views as to what your thoughts are. Folks, if you are listening make sure that you give us a like and subscribe it makes a huge difference and lets us get great people to interview on the show. Make sure that you check out Casiola Allah if you are in any of the areas that they operate in and make sure that if you do have any worries or concerns that you get in touch and they can at least guide you in whichever way they see fit. Dennis, are there any final words that you would like to close us off on, or are we good to go?

Dennis: We’re good to go. Thank you so much for having me. It was so much fun and I know we can talk for hours and hours about everything. But yeah, don’t be too worried. Either find a better way to get those bookings. There are always going to be winners and losers in any downturn. And if you get to the end of it, you’re going to come out stronger. I think we have such an amazing future in front of us. The speed has grown, and more and more people are using short-term rentals and that’s not going to change. Recession.

Bart: Beautiful. My two key takeaways are one data and tools you need to look at that. There are three actually the other one is the channel manager. And then the last one is you’re gonna have to work. That’s the simple part of the equation. You gotta get you got to work this you got to figure it out. Dennis, thank you so much. Once again, have a fantastic evening. Thanks so much. Really appreciate it

Thank you so much for listening to the show. You can find us at theaccommodationshow.com where you can find all the show notes. links to resources we have talked about in transcripts from the show. I really do appreciate you listening. And if you’d like to support the show, please subscribe. Leave a comment and share it with others.

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