The Newest Vacation Rental Necessity

Introduction

Have you heard of post-sale travel insurance?  The new concept is quickly becoming a vacation rental necessity for vacation rental retailers, property managers, and software providers.  In the next three minutes I guarantee that you’ll understand post-sale travel insurance and some of the ways it can help your vacation rental company meet your goals, obtain more profit, and build better relationships with your guests.  In addition, we’ll explore a few of the more popular reasons why guests purchase post-sale travel insurance.

What Is Post-Sale Travel Insurance?

Travel insurance is a common way to protect guests from the risks of travel, and most professionals in the vacation rental industry understand how it works.  Post-sale travel insurance, on the other hand, is new and different from any other travel insurance products.  The primary differentiator is that it can be sold after the booking and final payment date all the way up until 24 hours before the start of the guest’s trip, which benefits both guests and hosts.

What Can Travel Insurance Do For Your Vacation Rental Company?

Post-sale travel insurance offers vacation rental companies an additional revenue stream without having to invest any resources, which means that all of the money generated is pure profit.  One software provider estimated that travel insurance could increase their profit per booking by up to 35% and that property managers could increase their profit per booking by 7%.

Guests love a seamless online purchase process, so finding a travel insurance website that fits your brand and is easy for guests to use is the key to earning additional revenue.  Some companies will even help you create a customized travel insurance website free of charge and in a matter of minutes.

Post-sale travel insurance is incredibly popular with property managers, because it allows them to protect the long term relationships with their guests.  Any travel insurance that prevents guests from purchasing insurance after the final deposit date inherently limits which guests it will cover. What you want is a policy that can be offered to guests up until just before the start of their trip.

Insurance companies are often known as heavily regulated and difficult to work with.  However, post-sale travel insurance is just the opposite since it eliminates the need for insurance licensing and signing a contract.

What Can Travel Insurance Do For Your Guests?

Many guests find that post-sale travel insurance provides them with peace of mind when traveling, a rare occurrence for most guests.  Furthermore many guests are used to staying in hotels where cancellation conditions are very generous, in comparison to the strict cancellation conditions of vacation rentals.

Post-sale travel insurance claims happen most frequently due to guest injury or illness.  Purchasing post-sale travel insurance helps guests protect against accident and medical expenses during their trip, and also protects against emergency medical evacuation.  Even if guests have a pre-existing condition, they can purchase a valid policy if it is bought within 20 days after their trip deposit is made.

Post-sale travel insurance is also extremely valuable in case of injury, illness, job loss, or a myriad of other covered reasons that might cause a guest to cancel all or a portion of their vacation rental reservation and/or trip.  By purchasing travel insurance the guest immediately transfers all of  these cancellation risks to the insurance company.

How To Get Post-Sale Travel Insurance

The best place to begin offering post-sale travel insurance is through www.pablow.com, which will allow you to create a customized travel insurance website in just a matter of minutes without the licensing and contracts as mentioned above.  The website they provide is completely free and their affiliate fees are competitive with the rest of the industry.  Post-sale travel insurance can be yours in no time!

The Biggest Battle Facing the Vacation Rental Industry Today

INTRODUCTION

There are thousands of battles occurring in counties all across the United States between those in favor and those opposed to short-term vacation rentals.  At the center of the intense debate between both sides are short-term vacation rental regulations and enforcement of those regulations.

Those who support the vacation rental industry and advocate for fewer regulations and enforcement mechanisms primarily consist of vacation rental guests, property management, and rental companies.  On the opposite side of the argument are those who are opposing the vacation rental industry and are advocating for stronger regulations and enforcement mechanisms.  Those opposing the vacation rental industry typically include the hotel industry, vacation rental neighbors, and local government officials.

 

THOSE SUPPORTING THE VACATION RENTAL INDUSTRY

Ironically the vacation rental industry depends on guests for revenue, but they are the least passionate about the ongoing battle surrounding the vacation rental industry.  Realistically it’s because guests have the least to lose in the situation.  If vacation rentals are outlawed across the country then the guests that used to use short term vacation rentals for their travel accommodations will simply find another place to stay, which most likely means a hotel.

Comprising vacation rental property management are property managers and property owners.  Property management is in favor of fewer regulations and enforcement mechanisms because every change to their process and additional staff person required to ensure compliance with regulations costs the company money.  Lifestyle Properties’ general manager Katy Armes in Newberg, OR explains “There’s not enough beds in the county to accommodate the tourism influx. Short of new hotel construction, [increasing local accommodations] will likely come about through more residences being converted to vacation rentals.”¹  Similarly in Sonoma, CA vacation rentals make up about one fourth of all travel accommodations.²  Other reasons property management state in favor of vacation rentals include that the industry brings additional guests to the area, it creates additional revenue for residents, and it provides competition in a non-competitive industry.

The strongest advocates for short term vacation rentals and companies providing the strongest opposition to new regulations are the vacation rental companies, whose largest players include Airbnb, VRBO, HomeAway, and Booking.com.  These companies profit mightily from short term vacation rentals, which provides quite the motivation to make it as easy and profitable as possible for homeowners to become vacation rental hosts.  Airbnb, the most well-known company in the industry, in the face of heavy regulations in Miami says that it wants to work with the city to develop “clear, fair rules.”³  In general the largest companies are fighting heavier regulations to ensure survival of the industry and sharing economy they depend on.

 

THOSE OPPOSING THE VACATION RENTAL INDUSTRY

The hotel industry serves as the biggest barrier to the continued success of the vacation rental industry.  As the vacation rental industry has grown, hotels have seen their competitors increase and occupancy rates decrease, though the growth in the vacation rental market is not proportional to the small decrease in hotel demand.³  Given the decrease in demand for hotel accommodations, hotels have to reduce their rates to ensure occupancy, which reduces their profitability.

Some neighbors of vacation rental homes are understandably upset with vacation rentals because of their experiences.  Henan Cardeno, a passionate opponent of vacation rental homes contends that short term vacation rentals are “changing the character and the nature of our neighborhoods.”³  Alicia Wuscher, a Palm Island resident, says the short term rental next to her home is notorious for throwing parties that shake her home.⁴  Susan Strong told the Desert Sun that she had to endure five years of loud music, yelling, and laughing because of a short term vacation next door that was not judicious in who could rent it out.⁴  While it appears as though some neighbors have a negative view of vacation rentals, according to a 2017 David Binder Research poll of 500 Miami residents, more than half said they had a favorable opinion of Airbnb and just 1 in 10 respondents said they had an unfavorable opinion.³  So up to this point reactions are still mixed among the general public.

Local government officials are usually opposed to vacation rentals, which make their job of regulation more difficult than ever before.  As a result of their frustration, those in favor of the vacation rental industry would contend they have received heavy regulations and ridiculous fines.

 

REGULATIONS AND ENFORCEMENT

Since the regulations are largely passed and enforced on the local level, there is a great variety in what the regulations look like.  In San Francisco, the city where Airbnb was founded, short-term vacation rental owners are limited to renting in certain areas and must register their homes for $50.³  In Palm Springs the local government is proposing a limit on the number of times a home can be rented each year, which discourages short-term weekend rentals.  Palm Springs officials also are considering raising permit fees to $900 per year and limiting vacation rental owners to just a single vacation rental.⁴  On the corporate side of the industry, Airbnb recently agreed for the first time to enforce legal limits on the number of nights a vacation rental can be rented each year in London and Amsterdam.⁵  This compromise with regulators could be a foreshadowing of what is yet to come in the United States.

To ensure that regulations are followed, Miami penalizes illegal vacation rentals by charging both the owner and the rental company $20,000.  These fines are much higher than most other counties across the United States, but Miami regulators suggest that they could even raise the fines further.  To this point they’ve already passed out $4 million in fines.³  In Palm Springs, with the new proposal in place operating a home without a permit and failing to report the rental agreement could result in a $7,500 fine and homeowners would be limited to one vacation rental.⁴  Other enforcement mechanisms besides fines are still being explored, as fines do not appear to be effectively deterring many vacation rental owners from operating outside of the law.

 

RESOLUTION

Instead of proposing a resolution in this battle, given that each county and city are imposing their own regulations, it’s probably better to consider a couple of questions moving forward.

Are short term vacation rentals on their way out?  Are all vacation rentals doomed to fail?  If the vacation rental business continues to grow, will our hotel industry collapse?  What will the future of tourism and travel accommodations look like?  Is there a way the industry and its opponents can come to a compromise?  Can the vacation rental and hotel industries coexist in the sharing economy?

What are your thoughts on this very contentious issue?  We’d love to hear them and have a discussion!

 

SOURCES

¹ http://pamplinmedia.com/nbg/142-news/334281-214131-vacation-rental-industry-experiences-modest-growth

² http://www.pressdemocrat.com/news/6343358-181/sharp-rise-in-sonoma-county?artslide=0

³ http://www.miamiherald.com/news/business/biz-monday/article117332773.html – Miami stuff

⁴ http://www.desertsun.com/story/money/business/tourism/2016/11/30/palm-springs-set-tighten-vacation-rental-rules-prompts-industry-pushback/94628142/

⁵  http://www.wsj.com/articles/airbnb-agrees-to-enforce-amsterdam-limit-on-rentals-1480580233