Anyone interested in owning a vacation rental management business will at some point ask themselves the question, “why should I spend the money to license a vacation rental business when I could go out and do this on my own at a fraction of the cost?”
After all, most people in the U.S. have gone on a vacation at one time or another. Many of those people have even stayed in a vacation rental property. Seems easy enough to master the concepts of having properties, marketing those properties to eager vacationers, collecting their money, and checking them in, right?
Going it on your own is certainly do-able.
Here at SkyRun, of course we’re a little biased. But we do recognize that this is a legitimate question, one we’ve answered many times. And we know you want a straight answer.
The reason franchising is so appealing for many potential business investors is that it offers a proven business model to follow. So, in the vacation rental industry that means the systems are already in place and reservations could start coming in within days or weeks.
If you’re doing it on your own, it could be months, if not years, of acquiring properties, setting up reservations and accounting systems, and getting the word out there that you’re open for business.
Let’s take a closer look at some things to consider when making your decision.Before You Get Started
Remember, in order to have a vacation rental business, you need access to vacation rental properties.
How are you going to get those properties?
You’re going to have to find homeowners in desirable locations who are interested in using their homes as a vacation rental. There’s really no telling how long this could take. Acquiring vacation properties might even end up being a door-to-door proposition for you as you seek someone willing to entrust you with their vacation rental. Think about it. Would you turn over your expensive vacation rental property to just anyone?
Working with the benefit of a franchise model, a nationally recognized brand, this process is much easier. Folks will be more inclined to entrust you with their vacation property if there’s a reputable business standing behind you. This alone could cut the time in half compared to finding those properties on your own. Additionally, a franchisor will help with the legalities and paperwork it takes to sign on homeowners to your network.
Getting out of the gate quickly is key to making profits in year one. So, the step of quickly getting properties into your network cannot be overemphasized.
But let’s just say you manage to find some people willing to turn over their vacation rental property to you on your own. Where do you go from there?
Standing on the street corner with a sign probably isn’t your idea of operating a business. You need a business model. And maybe some systems.Systems
Just think of the enormity of systems alone. As an independent vacation rental business owner, your phone could be ringing at any time of day or night taking reservations and answering questions.
No business owner wants to be quite that busy. So, you’ll need a system for taking reservations.
With a franchise license agreement, you’ll have access to a reservations system already up, running and taking reservations day in and day out.
You’ll also have to set up a system for collecting money. Most people are accustomed to paying online with the simple click of a button. So, it takes an accounting system to streamline getting paid.
Those are just two systems to speak of. You’ll need to have automatic systems for a whole host of other business operations that you probably haven’t even considered yet like managing the properties, communicating with guests, building and maintaining a website, and managing customer relations.
But let’s say for argument’s sake that systems issues don’t scare you away from striking out on your own. Keep in mind there’s much more to owning a vacation rental management business than just the systems.Marketing and Advertising
The most important thing of all when it comes to making money in the vacation rental industry is getting vacationers into the properties. If you’re out on your own, where do you suppose those reservations are going to come from?
Yes, there are enterprises like Vrbo and Airbnb that will list your properties, but they aren’t property management systems. They are simply a reservations platform. And they’ll also want to take their cut. Plus, you may have a hard time establishing a working relationship with those companies. After all, they don’t need you as much as you need them.
Larger operators, such as SkyRun, can establish themselves as premier partners with Vrbo and Airbnb and get insider knowledge on how to maximize bookings on their platforms as well as with other online travel agency (OTA) partners. As a franchisee, you can tap into those OTA outlets, taking advantage of the leveraged relationship simply by your association with a franchise.
If you’re an independent vacation rental business owner, you don’t have the volume, the systems, or the name recognition, so you may never be able to establish a good relationship with the OTAs.
With limited help from the OTAs and their vast inventory of properties, you may need to seek other avenues for advertising your vacation properties. In an effort to make your properties stand out from all the others you will have to spend money advertising online, buying print and social media advertising, and getting your business name out there in as many places as you can.
In fact, you might even end up hiring a marketing agency to help with branding and advertising. More money spent on something that’s already there for the taking with a franchise.
A franchise license agreement on the other hand, will give you access to all its branding, advertising, and marketing. Using the franchisor’s model, you will benefit from their local and national reach as well as digital and other traditional forms of advertising. That’s what you pay for when you buy a license to franchise.Training and On-Going Support
Training and on-going support are often overlooked factors when making the decision about whether to operate independently versus operating under a franchise license agreement.
Anyone who’s ever taken an independent study course will tell you, there is infinite value in having in-person, hands-on training to guide you. A few weeks of training with a franchise operation and you’ll be well on your way to having your vacation rental management business up and running.
If you’re out on your own, it’s trial by error and many weeks, months, even years of slipping and sliding on a steep learning curve.
And during that treacherous time, who can you turn to for help? As a franchisee, if you have problems or don’t understand an issue that’s come up, there’s always a support system--real people--to help you work through whatever difficulties you’re having.
But if you’re an independent vacation rental business owner, who can you turn to? If you’re lucky, maybe there’s a Facebook group to join and you can ask your questions there.For Us, it’s an Easy Decision
With a vacation rental property management franchise licensing business, yes, you pay money up front and typically some sort of royalty or fee for every booking, or a flat yearly fee. But the technology and software systems are all in place, the marketing and branding are part of the deal, and you have a support system to turn to for help.
From accounting, to reservations, to marketing, to learning the trade, your upfront investment pays for systems in place that you don’t have to create. You’ll enjoy the convenience of a model to follow, broad marketing and advertising, and expertise in the industry. The head start you’ll get from a franchise licensing agreement will have you taking reservations and making a profit in the shortest possible time and that’s hard to put a price tag on.What Makes Us Such an Authority on This Subject?