The vacation rental industry

The vacation rental industry

The introduction of the worldwide web came with fundamental changes in the travel experience as the entire hotel and travel industry overturned, and new brands emerged to benefit from the opportunity. The existing players were left behind, struggling to adapt to the increasingly wild rate of change. Consumers began to demand quality, variety, and affordability as the exposure to multiple choices presented itself through websites, mobile applications, and other software. Over the past several years, the hotel industry has developed and widened, creating opportunities that were not available before. Vacation rentals are an example of such opportunities, and Turnkey Vacation Rentals has taken it up, offering a variety of quality and affordable boarding options available in multiple vacation destinations.

The vacation rental industry has continued to grow since its popularity started taking root, and for the past decade, a rough growth rate of 10 percent has been witnessed. The growth is primarily impacted by the upcoming desire of many travelers to stay at home instead of a hotel. The proof of this trend features in the Turnkey Vacation Rentals’ 2019 Consumer Travel survey that recorded 64 percent of travelers preferring a stay in vacation rentals to hotels. The 2018 Consumer Travel Survey was under by 10 percent, clearly indicating that vacation rentals are becoming more popular as compared to hotels

About Turnkey

Turnkey Vacation Rentals was co-founded in 2013 by Banczak and T.J. Clark as a company offering property management service for a comfortable and quality vacation in popular United States destinations. It was founded in Austin, Texas, and Altos Ventures, Adam Street Partners, Silvertone Partners, institutional and angel investors have venture-backed it. Turnkey brand is leading in the vacation rental. It offers consumers dependability and high quality experience while elevating its management processes, marketing, and a return on investments for homeowners of vacation rentals Austin (2019). To ensure satisfactory vacation rental experiences for their consumers, Turnkey has integrated the smart home technology, installing digital smart locks, HomeDroid tablets, noise decibel monitors, field sync housekeeping scheduler in partnership with local homeowners, and in-market team.

Key Leaders and Board of Management

Turnkey Vacation Rentals is led by John Banczak, who is the chairman of the board of directors, the chief executive officer T. J Clark who also happens to be the CEO of Limos.com, as well as the vice president of Engineering Doug Squires Austin (2017). Significant investors of Turnkey include various travel industry and worldwide web luminaries like Richard Barton, who is the co-founder of Expedia as well as Zillow; Joey Levin, the chief executive officer IAC and Barney Harford the chief executive officer of Orbitz. Others are Spencer Rascoff the co-founder of Hotwire and the chief executive officer of Zillow; co-founder of TripIt and co-founder of Charish; Robert Hohman working with Expedia and the chief executive officer of Hotwire and co-founder of Glassdoor, Alexis De Belloy, Karl Peterson the co-founder of Hotwire, and Greg Slyngstad, the co-founder of Expedia and the founder VacationSpot. Other investors who are also on Turnkey’s board of directors include Gregg Brockway, a co-founder of hotwire, and Eric Goldreyer, who is the founder of BnB.com.

Significant Milestones

Turnkey vocational rental services were launched in Austin, Texas, in January 2013, and in March of the same year, as Clark indicated, they received their first guests for SXSW. By August 2013, Turnkey had dozens of homes in their service, and the number was increasing. On August 8, 2013, Turnkey Chief Executive Officer, T. J Clark, announced 1.5 million dollars in seed funding from the travel industry investors. At this point, Turnkey was developing mobile technology-based operations like marketing Tierney (2017), management of rental homes, and logistics systems to deliver the lowest costs in the industry for the homeowners as well as offering high quality services to the guests.

In June 2014, Turkey Vacation Rentals managed to secure three million dollars in seed funding from Silverton Partners and recorded an impressive number of online travel executives. The new financing brought Turnkey’s total seed funding to 4.8 million dollars. By June 2014, Turnkey boasted of the empowerment of homeowners by managing the entire rental process and marketing through significant travel and hotel sites like Airbnb. Their services included providing hotel-like, handling guest support, management, and organizing cleaning and maintenance through mobile applications Wyman et al., (2020). By then, Turnkey had recorded almost two hundred rental homes in three markets, namely, Austin and Port Aransas in Texas and Santa Barbara in California. Turnkey’s strategies on the new funding was to launch ten new markets in beach, ski, and metro localities.

On March 10, 2016, Turnkey Vacation Rentals managed to raise 10 million dollars to allow expansion of its vacation rental management services. The principal investor, Silverton Partners, increased its stakes by joining this round of fundraising. Silverton Partners had two board members in Turnkey Vacation Rental. Other investors who participated in the March 2016 fundraising included the Altos Ventures of California. At this point, Turnkey had generated 20 million dollars from various investors, Austin (2016). It also offered tools for homeowners to manage their listings in more sites, including VBRO and handling home management issues like cleaning and check-ins for a fee of 18 percent.

September 2016 saw Turnkey Vacation Rentals opening new local offices to offer premier on-site services for the homeowners as well as guests. These offices were set up in various markets, including Fort Lauderdale, Big Bear, Puget Sound, and Maine, hence increasing the number of local offices to thirty-two. General Managers for these offices were named, and Turnkey boasted of having doubled the number of these property management offices over the previous twelve months Austin (2016). They had improved their technological base and had an all-time guest support system to offer prompt response in case of an inquiry, secure online and offline booking systems, a cancellation policy, digital locks providing easy keyless access and a Samsung Galaxy tablet to use in the rental homes for easy access to information about the home as well as easily checking in and out.

At this point, homeowners had a dashboard in Turnkey’s website for the access of updated financial information, including past and future revenues, payments, taxes, and expenses. Turnkey’s technologies also provided tracking of maintenance and cleaning visits, listings of professional properties in the travel websites with detailed and comprehensive photos and descriptions of the homes Allen (2016), provision of extensive marketing for the homes on more than twenty rental websites, and local staff as well as licensed vendors for maintenance and professional cleaning.

In March 2017, Turnkey Vacation Rentals, Incorporated, had become the third-largest vacation management company in the United States having operated for only three years. At this time, the company managed to raise twenty-one million dollars in funding for expansion to new markets and to support the development of its mobile technology platform, which was at the moment leading in the industry. The total capital raised since the company began operation in 2013, was 41 million dollars with existing investors like Silverton Partners and Altos Ventures taking part in the fundraising as well as the Chicago-based firm, Adams Street Partners. That year, Turnkey boasted of providing vacation rental management services for thousands of homes in forty markets and intended to double that number by the end of the year while improving on its revolutionary technology platform Austin (2017). The same year, Turnkey planned to roll out virtual tours, show floor plans, and 3D models of all the homes it managed over an all-round channel of communication, allowing guests to communicate through phone calls, emails, or SMS. They also intended to launch the next generation Turnkey HomeDroid which offered consumers information ranging from how to operate the machinery at home to the location of the nearest gas station.

On June 22, 2017, Turnkey Vacation Rentals, Incorporated, was named the 2017 red herring top 100 North America winner. The award recognizes the most innovative and exciting private technology company, and this time, Turnkey joined the likes of Facebook, Google, YouTube, Skype, Alibaba, Twitter, and other tech giants who had previously won the award. By 2017, Turnkey had employed two hundred and fifty people Austin (2017). In August 2017, Turnkey announced having opened eleven more local offices over the past several months in new markets including, Asheville, Florida, Central Oregon Coast, Hilton Head, Winter Park, Maui and Oahu, and Central Coast and Monterey Bay. On September 14, the same year, Turnkey Vacation Rentals was granted the 2017 Travel Weekly Magellan Award for hospitality overall in the vacation rentals-villas-timeshare category.

On November 16, 2017, Turnkey was named as a 2017 built-in Austin top 100 tech company and a top ten best tech startup in Austin by Tech Tribune, and on 21st of the same month, it was chosen by HomeAway as their premier partner. In the series D financing that was carried out in March 2018, Turnkey was able to raise 31 million dollars, getting a total of 72 million dollars of funding since 2013. By March of that year, the company had a total of 153,506 cleaning facilities, more than 1.9 million photos reviewed, and 1,462 housekeeping vendors across all 55 markets Austin (2018). This situation had been enabled through the launch of Fieldsync technology, thus sustaining a 98 percent customer satisfaction. On December 20, Entrepreneur 360 named Turnkey as one of the best entrepreneurial companies in America for the second consecutive year.

Turnkey Vacation Rentals’ Chief Financial Officer was presented with the Woman’s Way Business Award for product innovation by the Austin Woman Magazine in May 2019. In July the same year, Turnkey Vacation Rentals, Inc. held its most significant funding round that saw them raise 48 million dollars, thereby surpassing 100 million dollars in total funding since 2013 Austin (2019). On October 23, 2019, Turnkey won the gold and silver Magellan Awards making it the only vacation rental company to win four Travel Weekly Magellan Awards in a period of three years.

Impacts on the Hotel Business

Since the introduction of the Turnkey vacation rental services, there has been a significant decline in travelers residing in hotels. According to research conducted by the company, female travelers, as well as males, prefer vacation rentals, although male travelers showed more willingness to stay in a hotel. However, between 2018 and 2019, the study showed a 10 percent increase in preference for vacation rentals to hotels. Some of the reasons cited by interviewed individuals included the availability of space and amenities in vacation rentals as well as location and costs Nieuwland & Melik (2018). In addition to that, due to the advancement of online platforms, the research showed a 4 percent decline in last-minute bookings and a 5 percent increase in bookings of six to eight months ahead. These records are an indication that the hotel business is on the verge of submitting to vacation rentals and their online management companies.

When consumers are making travel decisions, factors that influence their choices include the media, especially the ones spread in online platforms. Photos of a particular place, taken by consumer’s friends and families, are essential factors that affect their travel choices. Where the rental is located might influence the consumer decision more than the cost. The vacation rental industry is growing at a high rate and sending warning signals to hotel owners, for they are a real potential and current threat Jordan et al., (2019). Some of the recommendations that hotel owners should consider would be an expansion to more quiet locations and improvement on the provisions of the amenities to at least offer their customers tranquil experiences while improving the privatization of their stay. Probably, if the hotels were able to lower the costs at the same time offering the kind of technological services that Turnkey offers, they would be able to move with the tide.

Conclusion

In a nutshell, the online platforms adopted by hotel and travel agencies have been turning the industry over and over with the emergence of new opportunities and innovations that are projected to develop fast in the market. Such innovations include the vacation rental industry adopted by John Banczak and T.J Clark, the founders of Turnkey Vacation Rental Incorporated. Since its inauguration in 2013, the company has witnessed significant successes and drastic developments as a result of both the ambitious nature of its leaders and the willingness of the customers to quit bookings in hotels in search of more serene locations while still saving their money. The technological innovations driving Turnkey Vacation Rentals has helped the business to ascend above the hotel business.