Heads In Beds Show - The MOST Important Question To Ask Before Investing In Growth (Part I)

Episode Date: August 6, 2025

In this episode of The Heads In Beds Show, the duo asks this question: what is the #1 thing holding my vacation rental company back from growth? ⭐️ Links & Show NotesPaul Manzey Conrad O'ConnellConrad's Book: Mastering Vacation Rental MarketingConrad's Course: Mastering Vacation Rental Marketing 101🔗 Connect With BuildUp BookingsWebsiteFacebook PageInstagram🚀 About BuildUp BookingsBuildUp Bookings is a team of creative, problem solvers made to drive you more traffic, direct bookings and results for your accommodations brand. Reach out to us for help on search, social and email marketing for your vacation rental brand.

Welcome to the Heads of Med Show presented by Buildup Bookings. We teach you how to get more vacation rental properties, earn more revenue per property, master marketing, and increase your occupancy. Take your vacation rental marketing game to the next level by listening in. I'm your co-host Conrad. And I'm your co-host, Paul. All right, Paul. Good afternoon. How's it going? I think we got our technical difficulties or potential. Technical difficulties out of the way there.

I am doing great. It's summertime. I mean, this is, this is, this is what we work for this time to be busier. And it just feels like everybody's either busy right now or trying to find out why they're not busy. So I, this is, this is that interesting time of year. How are you doing, sir? I don't think you're John Mayer fan. You're probably not as much of a John Mayer fan as I am.

But there's a line in the song, Wildfire. uh that says a little bit of summer is what the whole year is all about so there you go that's your that's your john mirror lyric for today as it were like um you didn't ask for it but you got it anyway so no all good um yeah all things applying pretty well on my side don't really have any major complaints i think we're moving we're mixing we're finding new stuff i uh you know maybe maybe you know it might be fun total sidebar idea here pa maybe one time we should do like a business update podcast people even care at all like how is how is paul doing the business how's conrad's doing the business because we uh although it's on my mind it's not really always the topic of these shows

Maybe people would care about that. If you want that episode, email me, Conrad at buildupogness.com. Let us know if you care about that. If you don't care about it, then I won't do it. But if you care, it could be good. So I've got, Paul, we came up with a title for today's episode. I had to, there was some hyperbole in it,

and there was some excitement when we were doing the outline. Because I think we might have cracked it. I might have cracked it, which is, what is the most important question that you have to ask before investing growth in your vacational business? And I'll cut to the chase and I'll do it right now. The most important question to ask is, what is your constraint?

What is the thing that is stopping you from getting to that next level. Could be marketing. Could be advertising. Could be so many things that we're going to talk about today. But when I kind of came up with this idea, it's obviously not necessarily a new novel, you know, business concept. People have used this word a lot before. But I don't really have never heard anything or seen anyone talk about this. And I don't think that there's a list anywhere that I could find of someone actually outlining what are those constraints and what they look like. But when we started putting this outlaw together, you came up with so many good examples or like things that you've seen in your career at TNS or inventory or, you know,

in your work now of like, well, this was the problem. We thought it was this problem, but it was actually this problem. And it actually, like, unlocked this thing in my mind as we were working on this, of like, identifying and actually getting to the core of what a lot of these companies struggle with. And sometimes it's not related at all to what they hired you and I for. So that's the fun part for me or that's the part that unlocked something in my brain. So anyways, what's kind of your perspective on this idea of constraints and how it relates

to the person that you've dealt with now for, you know, 10 plus years at this point. Yeah, I mean, I think it's what I think what we uncovered as we were doing the outline as we were talking through this is it's really difficult to figure out like what is a constraint for your business and identifying them and then putting an actionable plan behind it to actually improve that because a lot of these do there's there's so much intermingling of we talk about I think you know the the clear one is everybody's worried about money cash trapped everything like something something like that but that's a really simple concept and I think when we You started breaking things down.

It's just like, well, money could be the issue. But there are also these other items lurking slightly below the surface or doing, you know, whatever that happens to be. So I do. I think that so often we get into, oh, it's this, it's that. For a while, it's, it's regulation. It's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, okay. Okay. All of these things could be contributing, all of these things could be providing a constraint to your potential growth of your business, but

what is that underlying factor there? So I do. I think that hopefully listening to this episode, it does. It just gives people a different way to look at their business and understand what are the things that are truly impacting. You know, we talk about KPIs as key performance indicators of data. That's just a data point. And a lot of these things that we're going to talk about today are the mechanations that actually are running your business here. So I do. I think that we're probably going to dabble into some areas where we are not experts by any means, but we've seen enough of this over the past 10 plus years. And that's not to say we're, but the experts are the experts, but there are people with plenty of experience. But we have. We've had the opportunity

to work with a lot of different companies, see a lot of these different things. And I think we've been, I know I've been previously, like, tasked with understanding, well, why isn't this working? Why isn't this? Why isn't my business working? Why isn't the website? Why aren't all these things working? And it was, it was kind of a, okay, I'm going to scrape the entire website or I'm going to scrape the entire business in my own, in my head and see, okay, what are some actual areas of improvement, optimization? But I didn't have a list. Like you said, I didn't have a list like this. And now thinking about all those times where I did an audit. or looked at a business, I did a SWAT analysis, something like that.

I think that they're having something like this to provide a better framework for kind of composing that action plan moving forward. It would have been really helpful. I'll tell you that much. So I do. I hope that people at least get some value in how to assess what the actual constraints of your business are versus what we think. might be constraining our business.

Yeah, yeah. Well, said, well, here's what I say to your expert comment. I don't think there were an expert in fixing all these issues. But I think given our exposure and given our knowledge of working with the different clients that we've worked with over the years, I think when we find one of these things, we can see it and we can be like, ah, that's the problem. Like, let's just go to regulation because that's one of ours, so we'll just kind of get that one out of the way quickly.

If you can't, you and I both know markets where this is the case, I can only get a short-term rental by stealing it from another manager. I've heard that on calls before. I'm certain you've heard that on calls before. If that's the case, then the available, you know, marketing angles you have become so small, so quickly. If there's only 85 permits in Napa Valley or there's only 85 properties that can be a short-term rental in South Lake Tahoe or whatever the case may be, and you have to steal to get one, you know, in a way it clarifies what you need to do. So that's, I guess, a bit of a plus. We don't need to think of all these, you know, crazy strategies and techniques for attracting, you know, investors or different homeowner marketing, you know, concepts, etc.

I know what I need to do. The downside is it's like, you know, we're having to find, I don't want to say a needle in a haystack because we know what it is, but we have to get the attention of someone in a very narrow way. That becomes a constraint. Like if there's only a cap number of properties that become available, more and more people want to manage that inventory. They want their cut, so to speak, it's going to be challenging to get that inventory. So if that's your situation, that's a constraint, that's a very clear, you know, constraint. Sometimes it's not that extreme where there's only 85 properties that can be short-term rentals and that's it. Sometimes it's more just like we have to fill out paperwork.

There's no guarantee that paperwork gets approved. Obviously, regulations are a good example that are pretty much also in many situations. I want to say completely outside your control, but largely outside your control, if you started managing in an area that didn't have regulations, and then they add regulations that made it much harder or in some cases impossible or illegal to run your business as you were running it before, I mean, you're boned. Let's just say it, right? Like, there's not much you can do.

You can go make your case in Friday City Council or in front of whatever committee, and they may vote whoever they vote. You know, like that that's a constraint that is very challenging. So again, do you and I have the answer to that? no but we can identify it and say like it thinking both things are the is that the problem so if you go into the Orlando market where it's like a free for all or here at the Myrtle Beach market where for the most part it's a free for all all all the number of permits is not a legal constraint you know as to why we can't get more inventory in Orlando Florida or Myrtle Beach we agree on

that right as a general concept or just in Florida are these sets of things there's plenty of inventory plenty of eyeballs that's not the problem let's move on to other constraints so that's just one example that we can we can dive into all right I'll start at the top of the list then and we'll skip over that regulation one we get there there. Because you mentioned it, but I want to maybe talk about it a minute more. Financial constraints or just cash, cash, money, money, right? Like, that's ultimately what drives marketing budgets, whether you're hiring someone, whether you're hiring an agency, a service, an individual consultant, whatever the case may be, that person, that service, that company is going to want money. And,

and, you know, you need to have your business set up in a way where that money can exist and you funded it properly. And I think this is a really common constraint. This has to be one of the most common constraints that I feel like I deal with on a regular basis. We're talking to someone for the first time is, do we actually have the money? Do we actually have the, you know, can we afford to hire this person? Can we then afford to run advertising for our business in this case? And I think sometimes recognizing that's a constraint is fair. But every company has a limited budget, right?

No company on earth has an unlimited budget, even the biggest ones that you've heard of. Or maybe the public investment fund out of Saudi, they don't have a budget. But for everybody else, there's a budget and we have to make profits, you know, off of our small business that we're running. And this can be, you know, a huge issue. So you may only have, you know, $4,000 a month to get to get to marketing, maybe in total. Maybe you feel like your customer acquisition cost on homeowner marketing is too high. Maybe you feel like your guest acquisition cost on guest marketing is too high, and you feel like

I can't put more in because when I, you know, the more I put in, I don't get us to get more efficiency. Maybe you have a highly seasonal business where you get a huge influx of cash during season. And then when the season's over, you know, your cash kind of goes up the door and you just kind of have to scrape by as you get to the next year. These are all important things to like recognize and understand. I think by the way, the way to solve this constraint in my opinion is probably can I fix my business model as my business model broken. And I've thought about this recently because I had a call to this effect not too long ago, or basically the person said, you know, I'm charging this level of commission and I'm getting some homeowners and making

some progress, but they weren't really growing the business that much in terms of their advertising and marketing. And I'm like, well, why not? And I think what we'll be uncovered after like a short five minute conversation is like, you're charging too little for your services. You're doing too much and you're not charging enough. So the bigger you get, the worse you actually get from like a margin in operational expenses perspective because he was hiring like maintenance people and he's hiring all these people to take care of the properties. And it was like his costs were going and faster than his revenue was, despite the fact that he was adding inventory. And I'm like, dude, if we don't go from 10% commission or 12% commission to 22% commission, you will fail.

And then his sort of sentiment was like, the reason I'm getting inventory is because my low commission. I'm like, that's what's killing you. You know, so we kind of, I mean, it was slightly more friendly phrasing that we had in this conversation, but that was the gist of the conversation. And I'm like, I can't fix that. Marketing can't fix that. That's a fundamental business flaw, you know, model issue that you need to solve before you get there. So to go back to it, financial money, cash constraints, they're real. Every small business has them, but you've got to set yourself up in a way where you have the opportunity to invest in marketing and growth. Otherwise, how are you ever going to do it?

I think that that's one of those things that, especially in markets that are so seasonal, I mean, a lot of the markets that we have in vacation rental space, we're lucky. Like, they are year-round markets. There is some seasonality, certainly within there. But I remember the first time that I went out to, like, the Delaware Beach area and just kind of talking to some of the managers out there. and they's you know listening to the we've got from april to august that's it like it is very difficult to come not even like run the business for 12 months we even when you're only when you've

got 12 weeks of capital that are going to run it but then to compare yourselves to other businesses of the same size in different markets that have season you know a full year season i think it's it's it makes it you know difficult to have this assessment of your your self-assessment to say well what am I doing differently than this business is nothing you could be doing everything operationally the exact same you could have no regulation constraints you could have all the right things in place outside the fact that people only come to your destination for 12 weeks a year that's it I mean this is something that even in with working with some of the small lodges in northern Minnesota it was the same type of thing they're open year round

but did we get a whole lot of bookings from November to February during our lovely travel season in Minnesota? No, we did not. So I do. I think that's what makes it so difficult to even have some of these conversations and bringing in someone from the outside is that, yes, you've seen some, we've seen things in 30 different markets. They might not work for your individual market there. So I think that it's a capital factor. It's a little bit of a market factor, geographic factor in there as well. But it's one of those things that I think it makes it very difficult to compare your apples to pineapple or apples to a carburetor in some cases because we're talking about two completely different things and two completely different businesses. Even though they're both vacation

rental management companies, there's some inherent differences on what, you know, where, even where they're at in the stage of their business. And we talk about that a little bit more as well here. So I do. I think that that cash, that cash cow is a, is a difficult conversation to have because you do you feel like you're manipulate you're just playing with numbers you know you're playing with your ADR you're playing with your rev par you're playing you're trying to make the numbers match and when you're you've gotten to a constraint where that's how you're playing the cash flow game yeah we probably have some other areas where we need to work on and improve uh just to make sure that you have a business in the long term there so yeah i could i could do a lot more in

cash financial side of it. I'll do one more though before we depart and that's what we talked about a lot offline with respect to homeowner marketing, which is I think there's a lot of data and facts and figures out there that indicate that long term you want to get as many homeowners as possible and you'll be handsomely rewarded for your company if you have homeowners that are on your program when you go to sell your company. A lot of data, we agree on that 100%. What is the tricky part about homeowner marketing is that your cash collected cycle is horrible. Like you are doing a lot of homeowner marketing. You are paying time effort, energy, money, fees, etc. out to these different services or different companies that can help you do those sorts of

things. And many of them work fantastically well, by the way. And you get more homeowners from them if you have a lot of other things set up correctly. But when you sign a homeowner, you pay a lot of money to get that lead. You pay even more to actually get them to sign the contract. And then you start to see a slow trickling in of cash, you know, let's say when you actually get that property alive. So the amount of the time, effort, energy spent to cash collected in the short term is horrible. Long term, it's amazing. And I think that's one thing that really constrains a lot of people because they can't do a lot of homeowner marketing when it costs XYZ amount of money and yes eventually I can justify it but at some point you just run out

of apples like you just don't have enough money to put in because there's other things that have to get funded so I don't know you want to add on that and I'll go to my next one on on tech and data yeah I mean that's that's certainly one that we saw we heard it was a not so much a complaint but the patience in understanding that it is a long-term play on the homeowner side it's tough it's tough to we I think it's very easy to invest those marketing dollars on the guest side when you can when you have a direct booking site that functions very well that converts very well and all of a sudden you see ROI rolling in in real time that's an easy thing to do but for those businesses and I like to it's that five to 15

that five to fit five to 20 units it's very difficult to make that capital investment work for those new units even though you know that you need your business you need it in your business you need it in your to grow and there were unfortunately a few of those sadder stories where we did we you know we would get a couple leads and that business would get up to six seven units eight units but that's all the further they got and maybe a year or two later they're not around anymore so i think that's that's always the i mean that's the consideration you have to make is where do you have to invest that money in the short term to make sure that you do have that long-term scalable business and yes We've talked about it.

We do need to invest in the homeowner side of things, but at what rate and at what pace? And again, can you make the operations, which I think we're going to jump into right now, really work for that new property that's coming on and make sure that it was the last thing. I had always asked people when we're talking about building out a keyword list for specific markets. And I want to go granular. But the last thing I want to do is get you a qualified lead in a spot where you can't manage. And I think people who are a little fuzzier with their borders and where they're actually going to and their markets and what they see as their destinations of operation, those costs do start to suck away from what you're actually able to do. And sure enough, we get ourselves upside down in a hurry there.

So it's lovely. Yeah. Yeah. By the way, everything we're talking about is kind of like picking at someone's soul right now. So I'll see about it about that. It's like, oh, yeah, I have this problem. I have this problem. Thanks, dude, for reminding me. But, you know, I think ultimately we're trying to do is like, if you solve these one at a time, you know, I think that's how you get out

of it, right? You can't solve 20, if you have 20 problems, you can't solve 20 problems at once, but you can solve one problem at a time. You can change your commission on new deals. You can then go back and renegotiate with old owners on that side. You can change the way you do that's something you can do right away that will fix some of your cash constraint issues. You can do better planning on budgeting, on marketing and to put it in a separate account. There's a lot of things you can do. So anyways, I digress. All right, I try to keep things moving because we're not making progress here. Maybe we'll need to do part too.

All right. So number two, technology, data constraints, or let's just call it your tech stack, as it were. It's a popular term in the industry. And maybe we don't have to spend a ton of time on it, because again, this is probably where we veer into that territory of, we're not experts on how to fix your tech issues, but boys, it apparent when we see it, right?

Like, you don't have the ability, like the, I'll give a good example. A lot of PMS system for a long time, they would have a template website, and there would be no tracking on that template website for e-commerce tracking. So bookings were happening, but we couldn't track any of them, so we couldn't attribute any results in our marketing effort. So it's like, hey, I really wish you were using insert PMS here, right?

Like this different PMS because the tracking just works out of the box. I'll give it owner as a shoutout, as I often tend to do. Their tracking out of the box is the best of any PMS period, including ones that cost 10x, 20x, 30x more than them. They just do a good job. You pop in your analytics code, pop in your pixel. Tracking just works by default out of the box. That's amazing.

So that's something where if you don't have the right tracking in place because you're using your PMS as checkout system and then you go to start marketing, you become, that, that becomes your limitation is the actual tech stack you're using, the software that you're using becomes limitation and being able to get better results from marketing. So again, nothing you and I could do about that when we're signing on and working with a client, but it ends up impacting us because of the fact that there's, you know, data issues. Or the other example that we had in our outline that we brainstormed on was, I want to do upsell and experience.

I want to go upsell early check in, et cetera. But my PMS doesn't offer an upsell module or an upsell system. So I got to go build out something manually or I got to do a lot of work to figure this out. It's a pain. You know, is it worth doing it, you know, in that scenario if you have to go do something really manually. I don't know, maybe not. So then you're left in that spot of like, man, this guy down the street can do check out upsells or upsells to, you know, guests coming in, and he's going to make more money than me because he's got upsells and I don't. And that becomes, again,

the constraint there is the technology you're using. So I'm sure we come up with a thousand examples, but what are some things that come to mind for you on that tech stack side of things? It's the fact that a lot of these businesses, they do. They select the PMS and you don't want to change because it is like to change a PMS. I mean, that's why we have some, great people in the industry who facilitate that process. They're experts in doing just that. So I get it. That's great. But the downside is that not wanting to move off a property management system that, let's say, your business has outgrown. That's a very difficult decision to make it. And because it is. I mean, oner-res, I think is a great example.

Owner-res is they have some, like you said, great reporting right out of the box. They have a lot of things that are very user-friendly, very intuitive, very great for the small manager just trying to build their business. But at a certain point, that's no longer going to satisfy all the needs of their business. So that becomes a constraint that was a huge boost to their benefit. As that business matures, you're going to need to evaluate your business at a different level. I mean, I think that is. You might not need all of the bells and whistles on an enterprise-level property.

management system and a channel manager and a housekeeping system and a guest communication system. We may not need all those things to be independent of themselves. Obviously, we want them to be integrated if possible, but that's the thing. We're talking about two or three systems maybe to start five systems, ten systems. You can try to chunk on anything into your PMS. And I promise you, they will probably try to build a direct integration or a connection that makes it work for you. But ultimately, that is. There's going to be some times where it becomes very difficult to identify, okay, is it better to be on X PMS or is it better to be on this PMS? And what does the future look like?

That's something that a lot of people typically ask those companies. And it's very difficult for the PMS companies to have that 10, 12 month, 18 month, 24 month roadmap because look at everything that changes in the 612. 18-month, 24-month calendar for us. So it is. I think that on the technology side, it's easy to get sucked into the bells and whistles. And I think, you know, you go to a conference like Darm or Burma or R-R-Nation or wherever you're going and you see all these vendors that do have the newest, latest, greatest things, and they tell you exactly how they're going to help your business. And they might. But what are those other limitations? Where are they going to constrain your business? I'm just the same way. If I see something pretty on

on Amazon or in Best Buy or something like that boy do I want to do I want to at least take a look under the hood and see see what's happening there so I think a lot of software marketing too it's phomo marketing right oh I'm missing out on some other feature and I'm missing out on this thing and boy if I had that all my issues would be solved and you know it's not uncommon for us to see someone switch PMSs and then regret it and want to go back to their old PMS or in some cases that's happened swap PMS and then go back to the old one you know you're later it's been happen yeah it's why it's so important to have the whole team making some of those decisions on the property management and things. That was a little bit painful to hear, oh, well, we're just

going to talk to this person. We're going to talk to the C-suite. We're going to talk to the general manager. Those are great people. I would love to make sure we're talking to the reservationist, to the housekeepers, to all these people who are actually going to be using the product on a daily basis. Because, again, there are some things that, oh, we got to report. That's really good. so I'm going to be able to show that to all the people when I have my meetings. But the housekeeper can't do the four things that they had to do before to complete a checkout within this. This is. These are the, I think these are the constraints that, especially on the software side, we need to go deeper.

We can't just service it up to management or C-suite or anything like that. Those are things that, especially when you're making technology decisions, has to. to be a team decision. I think that will allow you to maybe reduce some of those constraints because you have a better understanding of who needs this most. What do they need it for? And what's the out like what is the ultimate outcome we're looking for? Does does this PMS solve it? Does this resume management software solve what what is it that solves it? And I think you can try to piece together a slightly stronger tech stack at that point. But again, your tech stack is as strong as the integrations between the technology providers.

So you also want to make sure you're working with people who are keeping those things up to date because, again, the PMS is great, but if the different integrations from X, Y, and Z, other vendors are not connecting properly, you have a broken system. So not the fun part about it. I think that that's the one that we maybe, I think we get the brunt of some of those conversations because ultimately what's impacted is the bottom line performance in a lot of cases. The website is, you know, the overall website performance is impacted or things like that. And that goes back to, well, is it a marketing thing?

Could be marketing. That could be a part of it. But I think there's some other items that are also impacting the ultimate performance. of the business and the website and everything else there. Yeah, well, number three, by the way, is people. But as we talk it lead into the idea of people being a weakness or a constraint the business, that brings up a good point, right? Which is this idea of like the, the marketing will get blamed if numbers are down or

things are going well. And sometimes, you know, to our point, right, we deserve it. Or maybe there's some flaw there. But imagine there's been 10 negative reviews in a row because of bad cleaning. Imagine there was, you know, five people who went to get checking a property and it was dirty from the last one because the PMS failed and it didn't alert someone. Well, boy, does that kill our? you know, conversion rate on, let's say Airbnb, for example, if we get a bunch of negative

reviews all in the same time period. You know, we get buried in search, right? So it's like maybe there's an explanation for why it is, but it's like other things end up getting impacted from it. So yeah, and the interest of going along, because we could easily do an hour on just tech stack, human capital. So people, you know, if you don't have the right people on the team, I mean, I've seen it over and over again, you're going to have issues, you're going to have flaws. And I think the most obvious ones that we often are dealing with, this someone maybe who's inside of a company, who's either responsible for marketing as their primary job initiative, typically a little bit of a bigger company, would you see

that. Or you see that, hey, this person seems to be kind of savvy. They're on the reservations team. Let's pretend. Let's get them to do some marketing too. There's kind of this cross-training thing that I see typically a little bit of a smaller company or just more of a penny-pinching company. I mean, it's as friendly as I can say it may be in that respect. Oh, we're not going to hire someone dedicated for marketing. We're going to, you know, just do, you know, have this reservationist go half-time. Yeah. And then hire a bunch of external consultants and agencies, including maybe us to make it a reality. But it's like, man, so many different skill shortages can occur from that type of setup, right, where someone just doesn't even know what they're looking at.

They're doing things quickly, but they're just doing some poorly that, you know, we end up having more problems than actual wins there. But I get it, right? I mean, there's, God, there's so many reasons why people are a problem in this industry. And usually it's often referred to as go try to hire someone in Aspen, you know, or go try to hire someone in Park City to do a job for X amount of dollars per hour. And it's basically impossible. And I'm totally empathetic to that. I think I have a very unfair advantage of my business because we can hire people wherever in the world, literally. We've done that. People over the world work for buildup. if I only had to hire people where I'm based in South Carolina, I bet I would have actually a

much lower quality team. Maybe some pieces would be better, but I think piece would be a lot worse because we would have this like in office mindset that I think in my world would be a huge constraint. But in the world of, you know, I need someone to go clean the house. I need someone to go answer the phones who is in my office. I need someone to coordinate, you know, XYZ problem. It's like, yeah, you need a lot of people on your team and you got to find the best ones you can with the budgets and, you know, constraints that you have financially. And that can become an issue. So, yeah, I mean, a thousand things that we could identify as, like, people can cause so many problems in a business, unfortunately, you know, and sometimes it feels like when you're hiring someone, it's like, are we doing more harm than good when we're training someone and trying to get them up to speed? But without a doubt, I've seen this over and over again in my career.

If you've got the wrong people on the bus driving, driving that destination you're trying to get to grow the business, boy, is a little bit challenging if you got the wrong people, you know, in the wrong seats in that world. Just look at the markets that some of the top vacation rental markets. Yes, you got San Diego. Yeah, you've got some larger areas, but we're not talking about population centers by the means. In general, we're talking about secondary tertiary types of markets here where you are going to have to go off the beaten path a little bit to find people. And I mean, I used to hear the sales team at travel to do that. I mean, that was the pitch is that you're up in Brainerd Lakes, Minnesota. there are not a lot of people who are going to be able to come on, be your marketing,

manager, director, marketing, whatever that is, especially not at a cost-effective manner. Well, come in here, we're going to bring in a whole team and we're going to do it this way. Yeah, that's a reality. And that's on the marketing side, let's not talk about housekeepers. Let's talk about some of these other operational pieces. Talk about the handyman who services and does maintenance on all of your AD rentals. that's a lot to take into consideration there. And again, these are, for better or worse, the younger generations are not super interested in

more of that skilled labor. That is not exactly something that, you know, both tech schools aren't increasing in enrollment. It doesn't seem like right now. People are looking for, I'm not going to see an easy way, but it's harder to find people who are willing to do what is good, honest work of housekeeping and maintenance and doing some of these things. So that's only going to continue to be a problem. And I think that's going to be a people concern for some of these more saturated markets. So if you've got, I mean,

Myrtle Beach is a great example, 20,000 rentals that need to be cleaned on a daily, weekly, monthly basis. I would assume that there are quite a few different companies or quite a few different people who are servicing those, but I don't know. And what would happen if all of a sudden, you know, people moved away or again, the next, the next age group kind of just phases in and phases out. These are things that, how are you going to control that? That's a constraint on your business that you may not even know that you, that is upcoming, but certainly would have an impact on your operations.

But then again, on the homeowners. Homeowners are pissed because their home doesn't look good. travelers are not happy because the rooms are looking terrible. There's your negative reviews. Again, we get into that cycle, and it gets a little dicey here in a hurry. Now, what's that underlying cause or concern? That's what makes this just so exciting to try to understand. Is it the people?

Is it the fact that we have to pay more for the people? And then that becomes a cash constraint. It is. Everything becomes so intertwined. And again, trying to unbundle and figure out, What am I actually solving for? It's, we're playing, or what is this? This is calculus.

This is algebra. This is something that I was not a math person, Conrad. I was told no math in marketing outside of just getting numbers here. So I don't know about this. I was, I was decent amount. I don't know. There are certain things I didn't do well in, but other things were fine with me. But yeah, I think it's, you know, to this point, well, we did our formulas episode a few weeks ago.

I think it just came out in the feed like this week that we're recording this, but it came out a little bit a while ago as far as when you're going to, to listen to this. And yeah, I mean, talk about how complex the demand formula was for why someone would even want to come to the destination. I think the same thing applies here. So can't hear any more? I think it's very clear, by the way, Paul, we're not going to get through our whole list. So we'll do two parts on this one for the listener. So we're not even going to get through everything, but we'll try to maybe get to halfway through the list. Maybe that's a good target for us to make here with a few minutes left. So number four, I mean, I see this kind of

separate, similar, let's call these cousin issues or sister issues, if you will, but a brand awareness issue, a marketing issue or a sales issue could all be constraints in the business. So what I mean by brand issue is that no one knows who you are. They don't know why to trust you. They have no context for why someone would want to list their home with this property manager. You know, I've talked about that at length. What actually makes you better than other people out there. There's no reason why they feel like they should trust you to make an online direct booking. Hey, I've never heard of this company before. Why should I pop my credit card in this website? There can be brand awareness and credibility, you know, gaps or issues there.

Maybe they trust the OTA more. Those, I think, kind of tie into more of those brand things of like, I've never heard of you before. Again, why would I trust you with my multi-million dollar beachfront vacation rental home? Huge issue. You know, huge constraint, I would say, particularly when you're smaller. Marketing constraints, I mean, again, you and I could layer in 10,000 of them probably and go for two hours on it. But, you know, a weakness in search, having very poor results on having a Google penalty. I don't see that a lot anymore, but like I seen it the past from time to time, like that can hurt you. Having a sales issue constraint, hey, when I go to Brooks highlighted this so well with some of his research that I did with Jade

over inventory, hey, I called your business. And I was going to list my home with you and no one picked up the phone and then I'll have to voicemail and no one called me back there's a sales constraint right um just not executing well on those different you know brand pillars for awareness those marketing pillars for like tactical execution or those sales constraints with like having maybe it's a bit of a people issue often as well too but like having the right people in the right seats that are professional and how they want to approach a homeowner and work with them so it me a lot to say here I think maybe one other bucket that I would kind of put into this constraint in general it's just like over reliance on any one

single platform so obviously you know the most common example is we see you know, a property manager getting 75%, 80% of their bookings from Airbnb. And they find themselves in a bad spot if they're ever, you know, algorithm change knocks them out. Or they get those five bad reviews like we talked about because the software failed and now they're put in a bad spot. So anything, any over reliance, I think, would be a key factor for me to also consider that as like maybe a bit of a brand and marketing problem as well. But yeah, anything else that maybe kind of comes to mind as like a level thing without going into every little detail. Because like I said, we could probably do two hours just on all the marketing problems that pop up. But, you know, when it's a weakness,

it really does hurt things, doesn't it? Yeah. I mean, I think more for the, not as much for the marketing. Marketing certainly, I think over-reliance is a big one, low brand awareness. Those are big ones, not showing up in search. Those are correctable things. With the sales side, sales constraints, this was something that we saw a lot, a lot, a lot, a lot on the owner's side, a lot, a lot, a lot of Venturi because we would.

We would drive great leads, qualified leads that, again, we paid a pretty penny for. and those leads would that cash for it and those leads would not close and and those leads would continue to close and I think that that's at a certain point I won't lie it it was it was depressing for me to see the number of leads that we would generate and then the number of sales that would actually close deals that would come out of those it's yeah it's everybody's got a different process everybody's got a different system but if you don't have the right people going back to the capital if you don't have the right people going back to the capital if you don't have the people in place. And this is not to say that you need the BD person. You need a salesperson.

But if you, the owner, are unable to close new homeowners, you need to address that. That's one of those things where sales constraints probably feel a little more human to human there. It is. I think obviously on the website side of things, that kind of takes care of us for the marketing. That's going to do a lot of that. We're not doing a lot of, there's a little telephony that that still happens in the vacation rental space. But for the most part, you know, where we're still seeing, when you see those sales constraints, I think they come on the homeowner side of things. And they do.

I mean, that's when it starts to rear its ugly head of, yes, I've invested thousands, maybe tens of thousands of dollars to get leads that I can't close. And now my business is suffering here. I can't add more inventory. And, uh-oh, now we have those upside down levels there. So I think that that's probably the one that I've felt the most. The other side is when we're talking about just creating content, we've all been a part of those bottlenecks.

And then the marketing side of things where either we're going back and forth between approvals and proofing and then we have this over here and then we have over there. And then this person at the 11th hours decided, no, no, no, no, we want to switch this up. And now we have to recreate something completely new. That's another one of those things that I think it's, it's less performance-based and it's more operational on the marketing side of things of how do we have this process to be able to say, okay, this is how it's getting submitted. This is how we're doing approvals.

Nobody's coming in at the last minute. And we are definitely continuing to push out solid marketing content. I think that'd be the other area where marketing tends to feel that or be a constraint and then feel that constraint as well. Yeah. By the way, when you were talking about the lack of the owner not being able to close deals, I can, whenever I think about closing deals, just my head always goes back to Gary Glenn Ross

and the iconic speech, you know, at the beginning of that movie. And we'll have to keep the words safe for work, but we'll say it differently. At one point in that speech, he goes, you close or you walk, right? He says a little bit differently in the movie. But yeah, you close or you walk, right? And I think what that comes down to is this idea that, like, at the end of the day, going back to the growth side of the business, growth happens through more homeowners.

The misconception I think some people have is that homeowners only come from home marketing. That's one thing that you and I picked out before, as that is not the case, right? Homeowners come from a myriad of sources and myriad of ways, and they come to companies that they feel like are healthy, or stable, are able to service them, that look reliable, that all these other factors go in their brain, not just one factor. But if you can't close, if you're given that opportunity to close, that homeowner and you blow it, then yeah, you're never going to grow. I mean, it's kind of simple, right? Like, there's no, I mean, I can make the case that, like, there's few clients I work with that are, like, not great

at closing, but they just kind of eventually chip away at it and win over time. you know what I mean like they're not great at closing but they've gotten a hundred referrals and they've been able to close 25 of them and they're like hey I'm doing pretty good I'm like yeah you're doing 85 of them imagine how much better you'd be doing right now but again the discussion for a different day but yeah it's like you know the leads aren't week year week sorry I'm just like going through the whole speech of my head right now but yeah that I agree 100 and I think that's a that's a fair one we can end on this one because we kind of already hit it but market demand constraints so the most obvious example that we could point out is like

guess how much little marketing mattered in the spring of 2020 when you got you know 10 thousand cancellations and you had to refund, you know, $500,000 out of your trust account to Airbnb after all those canceled reservations, right? Like, that's an extreme example, of course, but we can point to other examples. There was, we don't say the H word. By the way, I'm not saying the H word anymore. I just don't say that anymore because then it won't arrive to any destinations that we market in if we don't say it. But I mean, gosh, there was a heartbreaking flood that just hit Central Texas. Yeah, as we were recording this about a few days ago, week ago, maybe at this point. And it's like, if you're in that market, we have a client

more adjacent to that market, as you know, that we work with. But it's like, man, what could they have done to predict that, nothing? And it just kills the demand for that market for obvious reasons. And, you know, what happened was just horrifying. But unfortunately, in this world, these things happen a lot. You know, we have the H word. We have COVID hit us a few years ago. We have red tide that kills the market for a season. That's happened before. So there's so many things that you can't control. But macroeconomic changes, you know, seasonality changes. Like, imagine you're in a ski market and you get no snow that year. You're screwed. Like there's no, there's no marketing that's going to save you when that's the case. And, you know, to try to flip it to

positively. Sometimes you benefit from better weather. You know, oh, it was sunny and it didn't rain when it was supposed to. Awesome. Where people came down and wanted to visit. The H went the other way and it didn't end up hitting this destination. We didn't get those canceled bookings. Amazing. We had double the snow.

We normally do this year. Look how much longer our season is, right? So there are some good things that happen to, of course, in this world. But it feels like lately we hear mostly about these event-driven, like, shock scenario type things that occur, like flooding at H-words and so on and so forth. So, yeah, I mean, not much to maybe expand on there, but just like that is a constraint. Like, you are limited by the, the factors environmentally around you.

And unfortunately, sometimes those factors tend to be more demand harming than demand generating in my experience, unfortunately. Yeah. Yeah. I mean, I think that certainly, you know, some event-specific things. I, you know, I'm like thinking about the eclipse. And so that's more of the positives. There are some market. I think there's a few more examples of market and demand boosts.

A Taylor Swift concert being chosen in. Right. But we've seen a lot of different natural disasters. We don't have to say the H word. Yeah, we don't say the H word anymore. That's a new buildup bookings rule. So I'm implementing it on the podcast as well. And for you, yeah, we don't say the H word anymore.

I think that whatever the cause is, weather is getting more extreme. So that's undeniable. So that is going to have an impact on, you know, sometimes positive, sometimes negative. and that's where we don't have the control. So being able to control all those other factors as much as we can to ensure that that constraint does not harm us in a devastating way and just in a let's move on and then pick up the pieces and do what we can do there kind of way.

You know, one thing we can't seem to control ourselves on either, Paul, is how long we go. So we're going to have to put a bow on this one. We'll come back for next recording on part two. We'll kind of do a little bit more on this because we have a few more that we can get to. But that is what we got for today. If you made it all the way to the end, dear listener, we love you, we thank you.

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