Our Thought Leader Spotlight series is a regular profile interview of interesting and notable ‘game changers’ in the international vacation and short-term rental industry.

We ask these industry experts, all with different backgrounds in the industry, questions that aim to get to the core of what they view as both the challenges and opportunities facing the vacation rental industry.

We also delve into how our Thought Leaders personally relate to the industry, and what they, and their businesses, bring to the collective table.

Simon Lehmann AJL Consulting

What businesses, organisations and enterprises are you currently involved with, in the industry?

I am the co-founder and CEO of AJL Consulting LLC. AJL is a boutique consultancy that specializes in the international private accommodation and vacation rental industry. We work with property managers, technology providers, start-ups and other businesses within this space. I am also a regular speaker at industry conferences and sit on the advisory board of various vacation rental and travel industry related organizations.

What do you consider to be the key to your success?

One of the keys to our success is that we have access to a global network of the entire vacation rental industry, reaching from property management companies of all sizes to private equity, venture capital and technology providers.

I also ensure that I stay abreast of everything that is happening within the hospitality landscape and that all the work we do is supported by data and facts.

Data and research are absolutely vital for making the right decisions in this fast-changing world and dynamic industry.

In your view, what are the biggest challenges, and or threats to the vacation rental industry?

I believe we are going to see further fragmentation. By this, I mean that more small property managers will emerge since there are very few barriers to entry. This will increase competition and have a negative effect on the margins we are able to obtain.

The OTA’s will continue to become stronger and will dominate the distribution of the product and therefore it is going to be harder to build a meaningful brand. The OTAs will drive the margin compression even further. This will result in unbundling of the services property managers provide to hosts, which is currently packed into one commission fee.

Distribution costs have become very transparent for hosts and they are no longer prepared to pay 30 % commission to property managers, while an RBO (rent-by-owner) pays just 5 % to Airbnb.

What countermeasures would you suggest for minimising these risks?

In my view, property managers need to become more flexible with their fee structure and start to offer a ‘Chinese Menu’ to their owners, which will allow their owners to pick and choose what kind of services they want to buy.

From marketing and distribution to cleaning and maintenance, from payment collection to guest communication and guest services. A standard commission will be a metric of the past! This new model will require full transparency towards the guest and host, which will then need to be supported by sophisticated technology to split all the services, which today are covered by one commission.

In your opinion, what are the greatest opportunities for both individual property management businesses, and the industry as a whole, both now and in the short to medium term future?

There are several elements that need to be considered here.

I strongly believe that with higher technology adoption, and an increased focus on guest experience and host services, we can create a far better experience for all our stakeholders.

Quality of the product needs to be further improved and we need rating standards instead of only reviews from the OTAs.

At the same time, technology will allow the industry to provide more efficiency for the operation which will allow for a reduction in costs and will counteract the margin compression.

The good news is that the market continues to grow in terms of demand and supply. This growth is providing the industry with great opportunities and also for new products.

Guest behaviour is also changing, and more and more travellers will demand our product. We just need to ensure we deliver a hotel-like experience in order to meet expectations.

If you were to start over again in the vacation rental industry, what would you do differently?

I have been in the private accommodation and vacation rental industry since 2005 and many things have changed during that period.

Many decisions have also been made over that time, and of course, there are a few decisions I would not make today, or I would wish to revert if possible. But overall, the main thing I would have done differently is to have focused even more on technology adoption to create more operational efficiencies, and also I would focus on online performance marketing to strengthen the brand, which in today’s world is hardly possible anymore.

And finally….. what and where would your dream vacation rental be, and who would you invite to share it with you?

My dream vacation rental destination would be Bali (Indonesia). I would take my kids and my wife!

The year is hectic enough and time is too precious, so I would not share it with anybody apart from my own family!

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