DARM 2022: A Hearty Vessel of Insights on a Sea of Constant Change

Data is never more popular than during uncertain times. However, unless an expert turns data into insights, something action can be taken on, then it’s just bytes. What the Data and Revenue Management conference did this year was pull together the industry’s information thought leaders for the most insightful two-and-a-half-day event.  

Tim Cafferty, Outer Banks Blue owner and president, and Jim Olin, CEO of C2G Advisors, tapped into a common sentiment when they stepped on a large stage inside Nashville’s Loews Vanderbilt hotel ballroom and joked about Airbnb.

“You know what they call Airbnb,” said Cafferty. “A vacation for everyone not involved in the vacation rental business.” Attendees enjoyed a good laugh, and he pointed out that Airbnb was not in the room, which got an even bigger laugh.

But when the next speaker and industry legend, John Suzuki, “patriarch of yield management” at Expedia, spoke about industry equalizers hiding in plain sight, he also mentioned Airbnb was not in the room. People cheered. Then a small voice in the very back of the large ballroom called out, “We’re here.” While this wasn’t a scene from the movie Poltergeist, the truth is they are here and they are coming for all the listings.

“Leverage the OTAs,” Suzuki said. “These guys have more data than you’re ever going to imagine.” A poignant statement since the Washington Post recently publish a few articles surfacing insights gleaned from Airbnb listings.

Bryan Boice, head of sales at HomeToGo, spoke on a panel moderated by Alex Husner and Annie Holcombe, where he also commented about working with OTAs. “Vrbo and Airbnb are focused on optimization while newer OTA’s like HomeToGo are focused on growth,” said Boice. “In most markets, these bigger marketplaces probably don’t want more properties, they just want to optimize those they have. That’s also why you’ll see more focus on owning the guest from Airbnb and Vrbo than HomeToGo.”  

Not everyone in attendance at DARM sees Airbnb as a “common enemy,” but there was a palpable nervous energy coming into the conference that the industry is changing. “We are entering stage three,” said Suzuki. “This industry is reaching a stage where the giants of the industry are changing over.” The industry is going through consolidation. National brands are absorbing local brands and OTAs are providing opportunities for a new type of short-term rental experience, leaving nary a mid-sized vacation rental company left standing.

Travis Wilburn, owner of Stay Charlottesville, spoke in a breakout session where his first slide was of an elephant. “Let’s address the elephant in the room, shall we,” he said. “We are a dying breed.” He was referring to vacation rental owners and property managers who came up in this industry, making something out of nothing with their bare hands.

Cafferty reminisced about the days when they had a whiteboard with maybe four data points on it – in the days before OTAs, before Wall Street cared about those whiteboards. It’s more complicated now. There’s more money in this industry now. Approximately $63 billion according to AirDNA. Things are getting complicated, especially for revenue managers.

“The concept has evolved into something very, very complicated,” said Suzuki. “There is an evolution to simplicity but that doesn’t relieve you of your obligation to learn about what we’re talking about here.”

With speakers like Jason Sprenkle and presenters like David Angotti of SmokyMountains.com, this event provided ample opportunities to learn. As Suzuki stated, “In this room are the smartest people in the industry.” After attending two days packed with no-fluff sessions, it’s this that this wasn’t an exaggeration. 

Angotti’s presentation started with the analogy of an Olympic athlete who might not have a ton of resources and tools, but has won multiple gold medals. Unlike Angotti, who hasn’t won any despite having one of suburbia’s most well-equipped basement gyms. Having the best tools only makes you a winner if you use them. He then proceeded to share some of today’s top digital marketing resources, such as SpyFu for spying on your competitor’s keywords, and ahrefs for unearthing all the data you need to outperform in your market. He also offered maverick-like ideas for leveraging your competitors’ data by using Moat to view high-performing ads that you can rebrand for your own marketing.

Angel Host, which does channel management for small to mid-sized companies, is also taking ideas from top performing lists and using that to inform their marketing strategies. In Orlando, for example, they know that a listing touting a pool is just like every other listing in Orlando. They study the top homes with game rooms, theme rooms, and see what keywords are used in their descriptions, then layer in better photography and pricing to outperform.

For revenue management, Angel Host shared their favorite key performance indicator – market penetration index. They take the market occupancy rate and their client’s occupancy rate to create an index number. If the number is higher than one, it means they are over pricing. If it is under one, too far under one, it means they are under pricing. The comp set, they said is crucial. Bad data in. Bad data out.

Market occupancy = 65%

Your occupancy = 75%

Index = 1.15

These are the insights that over 450 attendees came to learn.

AirDNA’s presentation about current occupancies by market was also well attended, and the slides were heavily photographed. Several follow up questions during the breakout session were about vacation rentals performance beating hotels during the pandemic. Jamie Lane, vice president of research, explained further about this data during his session in the ballroom the next day. A few of his charts stood out among the rest. One was the bar chart showing hosts were underperforming according to guests’ expectations. The other was his line chart showing that the vacation rental industry is expecting to earn $63 billion in 2022 earnings.

In summary, the data Jaimie provided from AirDNA showed what many attendees felt. The number of heads in beds is down this year compared to last year, which we need to realize was an anomaly, especially in Big Bear and Lake Tahoe. Forty of the top fifty markets are seeing a decline in occupancy. There are more short-term rentals available now than any other time in history, and yet, it still isn’t enough to meet demand. Airbnb is adding 80,000 new listings per month – three consecutive months of growth. “I expect this to come down,” said Lane. “We need to make sure we’re not competing as much with each other as we are with the hotel sector.”

Lane concluded by saying that GDP is expected to be very low over the next five months. Overall occupancy for short-term rentals is expected to be at 57 percent next year. “Hotels are back to 2019 levels, much quick than expected,” said Lane. Nevertheless, short-term rentals have taken a significantly larger share of spending at 13 percent of market share, down 3 percent from what should have been had we stayed on track from 2019’s pace. “This is the experience economy,” said Jamie. “We need to make sure we are meeting guest expectations.”

Suzuki echoed this statement as well when he addressed the crowded ballroom on day one of DARM 2022. “You guys have the opportunity to set the course for what this industry looks like in ten years,” he said. “This industry is going to be locked down in ten years. You have the opportunity to shape this now.”