The Problems with Vacation Rental Software: Part 1
Updated: Jul 11, 2019
This is the first of two posts in a response series to "Vacation Rental Software: The Good, the Bad, and the Ugly" by Simon Lehmann. Overall, Lehmann's piece is a great example of property managers unanimously saying "enough is enough".
- Hidden fees.
- Multiple systems.
- Numerous, complicated integrations.
- Misleading marketing.
TL; DR? We loved Lehmann's take on this issue. The amount of times this article got shared in our company Slack bordered on obsessive..but will this growing "enough is enough" mentality change anything?
Lehmann summarizes the root cause of all of the above problems in one word: Outdated.
Much of our industry's tech is old. These software companies are described as "legacy" for a reason: legacies don't pop up overnight. They've been around for 10+ years. The problem is that the growth of the vacation rental industry has outpaced these legacy software systems. The "powerhouses" of property management software are too slow to catch up. Due to them lagging behind, they are out of touch with our industry's experts; those who are witnessing the rapid progression first hand: property managers.
The real kicker is that this gap between large software companies and modern property managers has been a known issue for a while. It's been talked about again and again. And yet no change has taken place.
Legacy software companies have known for years they need to change, but there's no motivation for them to do so. In fact, they have been actively dragging their feet because updating functionality is not just time-consuming, but expensive. In addition to that, based on the way many of these legacy softwares are architected, it's not even possible for them to update their tech in a way that would keep them competitive with newer, more agile property management systems. This means that the property managers who are keeping up with our changing industry, who are trying to grow with it...can't. Their software is holding them back. Signs software systems are not progressing with the needs of the PMC include:
1) Marketing Themselves as "All-In-One"...But They're Not
Tech companies are businesses. Businesses want to be successful. In order to be successful, they're going to advertise themselves as something people want. In this case, that's a single system for everything: a PMS, a channel manager, reservation system, housekeeping & maintenance, etc. The way many, especially legacy systems, tap into this is to use language that alludes they are an "all-in-one" system...but they're not. In actuality, they are merely a network for integrations to other outdated softwares. The softwares they integrate to generally only do a single aspect of what short term management requires. In order to market they can do everything required for vacation rental management they have to integrate to multiple software systems. Why are they operating like this? Again, it's faster and cheaper than building the necessary software themselves. Building natively requires a lot of time and money...and they don't want to spend time and money. They just want to be successful, and will put that success above the user's experience. This is what forces property managers to use 5-10 different systems.
Tip: An easy way to ascertain whether or not the software you're using was built natively, is to ask yourself how many logins you use daily. If it's more than one, then it wasn't built natively, and you're not using an "all-in-one" system.
2) Consistent "Add On" Fees with Separate Invoicing
As we mentioned in #1, the majority of "all-in-one" platforms are merely integration networks. Their proprietary software doesn't contain much functionality. The way those businesses are successful is by marketing to the user, in this case the PMC, that they're a single platform. The price they present as part of that marketing, is only what it would cost for the PMC to use their system. This is where the hidden fees come in. In order for the user to have the "all-in-one" experience, they have to "add on" all the softwares that the initial software system is integrated with. These additional software systems have pricing all their own; after all, they're a separate company. This is why they invoice the user separately from the initial "all-in-one" system. This separate invoicing not only creates an accounting nightmare at the end of the month, but it's also why profit margins for the PMC end up being slim to none.
Tip: How many invoices are you receiving that are from different companies? If it's more than one, then it's not native, and you're not using an "all-in-one" system.
3) Despite the Addition of Automation, Manual Process Persists
At the end of the day, software, or automation, is supposed to eliminate manual process...not add to it. It's supposed to solve problems, not create more. The use of multiple outdated software systems necessitates manual process in order to coordinate between the individual systems. Legacy software companies haven't attempted to fix the fact their software requires manual process because it doesn't cost them anything. It does, however, cost the PMC. Manual process drains PMC resources in the form of time (ie: having to stop a task in order to manage a double booking) and money (ie: hiring an extra body purely for repeated data entry between multiple software systems). This means that ultimately, instead of the PMC purchasing a single software system that helps their business, they end up purchasing multiple software systems which cause more problems, keep them from growing, keep them from being profitable...and those systems intend to keep it that way.
On the bright side, these symptoms were ones JANIIS founders Blake and Jason recognized, and set out to rectify.
Story Time: In 2015, JANIIS didn't exist yet. JANIIS founders, Jason and Blake, were in the middle of traveling all over the country and shadowing property managers. They were talking to as many people as possible, and process mapping their operations. After almost a year of this, they had heard PMCs say the same problem repeatedly: "Our software doesn't do enough, and I end up doing too much." This was illustrated by all of the symptoms, plus more, that we discussed above.
The good news is that Jason and Blake had seen these types of problems before, and had solved them while working with long term rentals. The multi-family housing industry had previously been in the exact same predicament. Yes, solving the problems in the vacation rental industry would be daunting, and short term rentals have completely different pain points than long term rentals, but it was possible. Jason and Blake had personally seen it done before.
That's why JANIIS was founded. JANIIS was built as the solution to the outdated software systems that use misleading marketing to mandate hidden fees, multiple systems, complicated integrations, and hinder their user's growth. It was built to be the tool property managers could use to cut out manual process, and be able to grow from 2 to 20 to 200 units with no sacrifice in personalization or quality of experience. (Allow us to prove it to you!)
Now, granted, JANIIS is just one company in the massive vacation rental ecosystem. The symptoms described above have much more complexity to them, and JANIIS won't be able to solve them single handedly. Our next post in this series will dive into exactly what all the problems of current software companies cost PMCs, and how PMCs can change that to make their businesses more profitable.