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Vacation Rental Management Conference: How local property mangers can unite to face the big OTAs, with Jaume Barberena

How local property mangers can unite to face the big OTAs, with Jaume Barberena
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This article is part of our Rental Scale-Up vacation rental management conference series. This is an extract from our April 2020 conference: “Get Your Business Through the COVID-19 Crisis By Discovering How Local Property Managers Resist the Global Coronavirus Epidemic.”

Vacation Rental Management Conference: BizFlats’ Jaume Barberena

Jaume manages BizFlats, a boutique property management company in Barcelona. He strongly believes in the value of vacation rental managers getting together to change the industry. He will share with you the framework of actions that he thinks you and your peers should be replicating in your own region: Banding together to get more control of your distribution, so that OTAs do not dictate again their conditions and make up new force majeure / extenuating circumstances rules. He will tell you why the #bookdirect movement is good, but cannot work if everyone does it in isolation. He will also talk about redefining market rules, such as making travel insurance mandatory for high-ticket bookings.

Vacation Rental Management Conference: Video From The 2020 Local Property Manager Conference

  • Jaume sends his support to any colleagues in the industry who are facing business challenges right now.
  • His business is based in Barcelona and is seeing little to no activity right now.
  • Spain is beginning to loosen the lockdown rules, so Jaume is keeping an open mind about the future. Nobody knows exactly what will happen in the future.
  • Jaume started BizFlats in 2004 and manages 20 high-end boutique apartments. Right now, they’re doing maintenance projects in the units and making sure they’re perfect when guests can come back.
  • BizFlats manages the units on behalf of private owners, and the owners have been very proactive and supportive of the idea of investing in the upkeep of the apartments.
    • The owners are in the business for the long term due to the limited number of licenses available in Barcelona. The licenses are very valuable.
    • The licensing system has helped property owners in Barcelona feel more responsible for adding value to the community.
  • The coronavirus situation is a big pivot point in the industry – we’re all here thinking about the future.
  • Jaume has noticed that much of the content online (conferences, articles) aimed at helping property managers through this tough situation is aimed at property managers as individual entities – or content speaking to specific markets. Instead, there should be content about pushing the industry forward as a whole, with solutions that benefit all property managers.
  • When the OTAs (Airbnb, Expedia, Booking, etc.) came around, property managers were excited about the services they offered because it meant that property managers didn’t need to hustle as much to get reservations. They could just sign up and watch the bookings come in. However, now we’re realizing that these players weren’t really our friends all along, they’re our foes.
  • Let’s go back to basics, but instead of making parallel efforts in every market, the industry should come together and create a solution that everyone can use.
  • There should be a distribution channel that’s created by the vacation rental industry, benefits the vacation rental industry, and is owned by the vacation rental industry.
  • Booking policies may change in the future; for example, maybe reservations over a certain amount will have trip insurance built into the price or as a required add-on.
  • In a more direct and local booking experience, property managers can control the booking process and provide better customer service.
  • Watch for Jaume’s essay on this topic coming out soon.
  • Learn more or reach out to Jaume @BizFlats on Twitter or Instagram or [email protected]

Vacation Rental Management Conference: Full Conversation Between Jaume Barberena And Thibault Masson

Thibault:

Dear Rental Scale-Up group members, Thank you for joining us for this session. I’m with Jaume Barberena. Jaume is in Barcelona right now. And what’s interesting here is that not only is he with his company, BizFlats, a property manager who knows his market pretty well, but also he’s bringing to the table now a different approach to what’s going on. We’d be talking about topics such as why property managers and really all the industry members in regions, countries should get together to do a bit more about owning distribution. We’d be talking about us. So how it’s a moment where things can be refined. The industry’s at a crossroads. So what property managers should do right now because maybe it’s going to be too late to to do something else and not to get back into current. The past situation. It was, so we’re talking about the whole topic of, of why our property managers should they be the, the payer of last resort when it comes to constellations or just kind of topics. So what’s interesting, so tell me, thank you for, for talking with us today. And, and we’ll be covering this because what’s fine, very interesting here is that you give us a framework, think through this for people listening to it. And that’s valuable for anyone in the world. So I thank you for being here and, and how are you?

Jaume:

Well, thank you. Thank you, Thibault for having me on your web show. First I would just like to say a few words to, you know, for all our colleagues all around the world whose business is suffering right now because of the coronavirus crisis cutting in there, it’s we’ll all get through this. And vacation rentals will always be a significant part of, of the travel industry.

Thibault:

And how was it like in Barcelona then? How’s the lockdown and, and, and how’s business?

Jaume:

Well, what business is frankly bad to non-existent in the, in currently, we’re still looking forward to end of summer. Hopefully that there will be the tourism to come back. Mostly domestic people who can drive. The jury’s still out about what exactly the, the, the the phases of, of loosening a lockdown are going to be in, in Spain or in, so, you know, we’re, we’re approaching this with an open mind just preparing basically for the time that it does finally open up. And then I hopefully will see that it wraps up quickly. Maybe it’s slowly, there’s, right now all predictions are probably not realistic, right? We’re just playing it by ear. Hmm.

Thibault:

It’s interesting what you’re saying as well and it goes probably domestic travel. What I heard as well is that, for example, Spain was thinking of maybe opening some boulders this summer, maybe to neighboring countries like Portugal in France, but will these, these plans have a lot of impact right on. I’m with you for wanting to book right now or whether they be able to travel so far for your own business. Can you tell us a bit more about this flat? And I think it’s, it’s a business mostly based in Barcelona, right?

Jaume:

Yes. So we’re a local property manager here in Barcelona. The focus is on, on high end boutique type apartments. We’ve been, we started in 2004, so 16 years now. And you know, we’re, we’re taking this period now to make improvements to the apartments. We’ve been adding sound meters, for instance, to make sure that we don’t get issues with neighbors. We’re doing maintenance, we’re doing upkeep. So making sure that everything’s perfect for the day that we opened up again.

Thibault:

And these are your project managers, right? So this, these properties are owned by different people. And what’s the, what’s the thinking now? Are they, when you talk with them and you tell them, okay, now we know there’s no demand right now, but it’s, let’s improve the, this improve the place and this investor bit and making better. How do they react?

Jaume:

Oh, on, on, on the most part, they’ve all been very proactive. They’ve almost all been calling me right to say, let’s take advantage of this time too. Let’s do these little tweaks here. Can you, you know, when, when there’s furniture open, can you get, you know, like change these chairs and we’re getting all sorts of really good suggestions because we want to keep a dialogue flowing. They know it’s, they’re in it for the long term because of the licensing regime in Barcelona. So you have, you have a, there’s only a certain number of licenses and so people who have licenses know that they are valuable and therefore they invest in, in making sure that they will still be going in for the long term.

Thibault:

That’s a very interesting factor, right? This is why I really love talking with people in, in each different market because a license, having a license has a value. So obviously if you take your apartments out to get new long term rentals or tenants, you’re sort of losing on the investment you had made to get from the papers and have this license. So there’s this, there’s something in, I don’t know if they would be losing license, but at least having a license has a meaning and be able to say, to go back to what should the beginning of that vacation rentals business will come back. Probably making these people think, okay, I’m, I’m really there in the long haul because I went through all this and it, my business is legal and I’m right to set up. Maybe that could also be, is it a difference you see maybe with people who are like build this kind of a same empires and with that stuff, legal and legal places that we’re having, do you think it’s also a different behavioral perspective for property managers?

Jaume:

I can totally see that there’s a big difference between somebody who has, who is operating in an environment where there’s little to no barriers to entry, no licensing requirements or very light requirements. And therefore, you know, that their investment in the community is always going to be less than someone who knows that, you know, the business is on solid footing and that you know, all the legalities are covered and therefore they can invest for, for the longterm and in attracting the best guests to build the best revenue and ultimately a very profitable and sustainable business.

Thibault:

So obviously 16 years in business you have, how many properties do you have usually on these flats?

Jaume:

Well, we, we, yeah, so we’re keeping it boutique. We have 20 apartments in their management,

Thibault:

20 apartments, high-end property owners for the long haul. So you, you, you’ve seen it out. You so know a lot in industry. We’ve, we’ve met what, what’s interesting here is that already you brought, you brought us something about what’s happening in your own local market in thinking about license as something interesting, but you, you are setting your, so you’re thinking about writing an essay or writing something. That’s pretty, can share soon about what, why property managers now should get together. And obviously w you, you, there’s something called, because you were talking about, we’re talking here about distribution basically owning more your own distribution. So why, why do you think they should do that now?

Jaume:

Well, as you said, where we’re are, we are at you know, one day, one of those events that changes the, the, it’s, it’s a massive pivot point in, in a lot of things. But if we keep it to a vacation, rentals were all here, you know, all thinking about the future because basically our present is empty houses. So one of the things I hit, you know, I, and I, there’s this amazing amount of great content of their in, in form of seminars and form of mini conferences online. And one thing that I have noticed is that most of these are aimed at individuals that property managers as entities or, or, or Airbnb hosts as their own little entity. However, you know, in, in, in, in one of the major contributing factors to them. The debacle that we’ve seen in, in the rentals industry, there’s been that the large players in distribution are entities that are from without the industry.

Jaume:

They are outsiders, right? And then they, they look at the vacation rentals as just another product category to push as opposed to there being a distribution that is for the industry and from the industry. So, and I haven’t seen that. And my thinking is that the best way for the industry to, to, you know, to come back from, from this is also to create its own it’s own destiny with distribution. Now this, you know, I, I’ve given some thought to this, I think that probably the start would be at the local level, you know, the, the, the, each location, whatever that is. If it’s, so, depending on what the market side is. So if you look at, say the [inaudible], we could talk about me. So the con and Centra pay, which are each centers, but then there’s the coast, right? The whole coast as which is also considered an entity or a, or a destination market.

Jaume:

So, whether it be, you know, whichever of those clusters or maybe several of them in parallel, there’s massive talent and passion and there’s a why, right? They, they, all the managers in the location know why travelers want to know that. Hmm. And they have decades of expertise in running rentals and in attracting clients. Now at a certain point about what was it, eight, 10 years ago, these new entrants came in and they made it like, Oh, so if we just like put inventory on there, they sell it and dah, dah, dah. And we just bring people in. So that seemed an attractive proposition at the day because otherwise you had to do a lot more hustling. Now the other shoe has dropped, right. And these are not the friends. They are the phones. And I’m talking about, you know, Airbnb booking Expedia massive.

Thibault:

Yeah. They make them and OTA is these online travel agencies.

Jaume:

Oh yeah. OTAs. We can, sure. So, so in essence, let’s, let’s go a little bit, let’s go back to basics, but instead of, or in parallel to our own direct marketing efforts, you know, let’s, let’s at each cluster level look at the initiatives that could be a booking website or it could be some sort of a listing site. You know, I think that that is best decided on the micro level, what the best therapy, another best opportunity to, to go to, to, to undertake.

Thibault:

So because what you, what you’re saying is where is that basically there’s been in initiatives before getting people to property managers or vacation rental owners to get their own bookcase, whether the book direct movement, if what you’re saying here is that getting together to create a cluster then gives you a strength or a marketing power negotiating power to actually be able to go and even own part of the distribution. Right? That’s something bigger, right?

Jaume:

Precisely. Precisely that having, having a distribution channel that is from within the industry and owned by the industry and therefore in the best interest of the rentals industry.

Thibault:

What’s interesting as well then is it’s, so as you said, right, it depends to each region to to define what’s the the right, you know location, region, area, country, what’s the right locality really. And also as you said, it can be better and more beneficial for the industry itself because I guess also it may mean that they can define industry. Can you find some rules, and I’m thinking here maybe, but constellations orthopedic travel insurance, to be clear here is of course this would be none of cases where property managers had to refund or were forced to refund guests in this crisis. So how do you think this effort of getting together to define rules that are more beneficial to the whole industry?

Jaume:

Well, certainly the, the mere fact that it is run by the industry means that the industries that are going to shoot itself in the foot. And so, you know, you can then have policies which say, okay, so four bookings above what a certain level, yeah, let’s make trip insurance compulsory or build it into the price. I mean, there’s any number of ways of doing it, but then we make sure that the, that a, a, a player from outside is not going to rewrite the rules on the fly and they are not going to [inaudible] take hold of your cashflow on the fly. Right. I think that those, those two things alone with marriage putting together some kind of [inaudible] you know, cluster initiative for, for the rentals industry. If you add to that, that of course, then you can, you can have better margins.

Jaume:

You’re dealing direct with clients and that ultimately you, you, you, you have, you have the control and then, and you have a local, a local or a hyper local kind of branding and marketing that the big players don’t have and they’re not interested in, right. They’re just interested in having as many shiny boxes on their proverbial website shelves as they can. Whereas, you know, most, most of the really good managers, they’re interested in what kind of experience people will have at their location, right? The best way to provide that is to be the provider of record for these for these things rather than go through these intermediate.

Thibault:

So these are, these are interesting topics to be discussed. And again either through, I guess, associations property managers getting together or even talking with no distinction, marketing organization’s GMOs that can so help. So that’s, that’s, I think that’s it’s always thinks about for your time because I really think it’s, it’s a very different angle and more like an angle. Okay. Can people get together and thinking a bit more longterm and say, yes, it’s a period where people are reinventing their businesses, but

Jaume:

Can, can parts of the industry be reinvented itself themselves? That’s a very, a very fascinating topic. So if people want to reach out to, you know more, how can they do that?

Jaume:

Yes. So you can find me at BizFlats on Twitter or sorry, on Twitter or Instagram for that matter. Or [inaudible] dot com or by email. Okay. So I would put the links below the video so people can then reach out to you and know more. And I’m fully, when the, your, your essay on this topic is, is, is a available also linking, linking to it, making sure people can read it. Yeah. That’s fantastic. I think this, this is a great conversation that has that’s just getting started. So there’s, there’s a lot of work to be done and there’s a lot of fantastic discussions that are still to be held. And anyway, thank you for having me on the show. 

Thibault:

Yeah, you’re welcome, Jaume. All the best. See you. 

Jaume:

See you soon. Thank you. Bye. Bye.

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