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FIGHTING AN UPHILL BATTLE

April 18, 2014

A few years ago I was helping fellow homeowners in Ashland, Oregon to bring vacation home rentals into the mainstream. As expected, full-time bed and breakfast inns and hotels/motels were fighting this growing segment. Although I no longer have a dog in this fight (I sold my place), a recent story in the Wall Street Journal reveals how fast the lodging industry is changing.

Air B&B (Airbnb Inc.), which was launched in 2008 and allows you to rent out couches, rooms, apartments and homes through an online marketplace, now has more than 600,000 listings. It is planning on going public at a value of $10 billion. Compare this to Wyndham (they run Wyndham, Ramada and other brands) which has a market value of $9.4 billion. Or how about Hyatt Hotels that is valued at $8.4 billion. Even the runner-up in the vacation rental business, HomeAway Inc., which runs the major B&B site, is valued at $3.9 billion

In just a few years, vacation rentals have become the new force in tourism. They are a major alternative for millions of tourists, and a source of part-time income for homeowners. Their explosive growth demonstrates why you need to “embrace change” and why you need to be ahead of the curve when it comes to changing markets. Unfortunately, numerous small towns didn’t see this coming and are struggling with safety, oversight and tax collections issues with vacation rentals. It is easy to get blind sided if you only keep you eye on your business.

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