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Trend to Rewarding Good Design for Vacation Rental Houses

Author: Jennifer Sargent for Vacation House Review

Vacation house property managers realize that when we flock to the beaches, mountains or lakes for vacation, we’re not just there for the beaches, mountains or lakes. 

24BEugenia_8-sq-200px.jpgWe want to stay in the house that we don’t necessarily have at home: one with a media room and theater; top-of-the-line kitchen appliances; and the deft touch of an interior designer. 

To that end, many management companies have developed programs that encourage owners to make those improvements, although not everyone agrees on a grading system. The approaches of various resorts in the Carolinas are a good example of what’s going on nationally. 

The Kiawah Island Golf Resort in South Carolina adopted a tiered system nearly seven years ago with great success, Property Management Director Matthew Jasso says. 

Before, if a property was listed as a two-bedroom ocean view, “You just didn’t know what the level of furnishings was really going to be when push came to shove,” he says. “More and more people are saying ‘I want the total experience.’ ” 

Whether they are called Signature Elite, Platinum/Gold/Silver, or Premier/Luxe, they all have one goal: to ensure guests they are getting what they pay for in quality, and to maximize rental income in the process. 

Scott Leggat, vice president of Outer Beaches Realty on Hatteras Island, NC, notes that his company’s Signature Elite Program kept it from suffering too badly in the economic downturn. 

The program was launched three years ago, on the cusp of the recession. But guests were drawn to the cachet of houses that were guaranteed to have state-of-the-art electronics and wireless Internet, gourmet kitchens with high-end appliances, equipment and dishes, and beautiful décor. 

“In a time where there was surplus inventory, it gave [owners] a strong differentiator,” Leggat says. “It probably was a great hedge against price erosion and fewer reservations.” 

Both Jasso and Leggat say the properties in their top-tier programs are booked much earlier than the others in their portfolios, leading owners in the lower tiers to inquire how they can upgrade to the top level. 
Kiawah Golf Resort’s Premier properties have grown from 50 when the program was created to more than 250 today. And when Outer Beaches recruits new properties, owners ask how to get into the Signature Elite program five-to-one over the standard rental category. 
The level of luxury at vacation houses nearly trumps the location these days: The Vacation Rental Managers Association places great emphasis on the high-end amenities available as a reason for choosing them over a hotel. “Exclusive Luxury, Unmatched Privacy” is the headline of the article on the VRMA Web site touting the benefits of vacation houses over hotels. 
“A lot of property management companies have programs in place where they will walk through a home with the homeowners and provide suggestions as to what will make them more vacation-livable,” VRMA spokeswoman Amanda Drake says. “Some companies will work with interior designers to make sure all the homes will have the same look and feel.” 
But not all property managers are convinced that tiered programs are the way to go. 

“I’ve done it in the past, and I’ve had my head handed to me,” says Douglas Brindley, owner of Brindley Beach Realty in Corolla, NC. If he rates a house gold, the renter argues that it’s only worth silver, he explains. If he rates a house silver, the owner says it should be gold. 

Instead, Brindley says, “I let the house rate itself.” Renters post reviews on the Brindley Beach Web site, and also fill out electronic surveys. “A home that is known to be in quality condition by previous guests is going to do better.” 

In Pawley’s Island, SC, renters seem to care more about top-line electronics and wireless Internet over anything else, says Dana Arneman, property manager for Dunes Beach Home Rentals. And because the houses run from 1950s structures to brand new, he adds, grading them is tough. 

Every online reservation is followed up with a phone call from his staff, however, who know every property intimately and can explain all its features to the prospective renter. 

“We don’t really grade,” Arneman says. “You’ll start a lot of infighting with owners – that’s not something we want to be faced with just yet.” 

Trisha Howarth, hospitality sales and marketing director for Bald Head Island Limited off the coast of North Carolina, dismisses such reservations. They are currently working with Lee Foster, founder of Vacation House Review, to develop criteria for grading the houses under their management, with top grades garnering top rental rates. 

The company already has an internal system that affects how often homes are placed on their rotation, Howarth says. It will be formally publicized starting in 2011. 

“A lot of what’s fueling this is the online reviews,” Howarth says. “People are really exploring before they lay their money down. … A point-based system will help them know that what they’re spending and what they’re getting is the same.” 

Howarth doesn’t anticipate much push-back from owners, she says, because the criteria will be clearly defined: Are the furniture and golf carts updated? How old are the carpets and drapes? What condition are the kitchen appliances? Are the dishware and cutlery matching and in complete sets? 

“It will help us motivate owners to upgrade,” she says. “It gives us leverage to maximize revenue for both parties – you, the homeowner, and me, the agency.” 

Regardless of the approach, Doug Brindley quips, “a vacation rental home is not for the weak at heart or slight of pocket.”