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The Disruption and Product Life Cycle of the Vacation Rental Management Market in Sunriver, Oregon: A
Microcosm into the Changing Industry
by
Harley Coldiron
A THESIS
submitted to
Oregon State University
Honors College
in partial fulfillment of
the requirements for the
degree of
Honors Baccalaureate of Science in Hospitality Management Honors Associate
Presented June 4th, 2020
Commencement June, 2020
AN ABSTRACT OF THE THESIS OF
Harley Coldiron for the degree of Honors Baccalaureate of Science in Hospitality Management
presented on June 4, 2020. Title: The Disruption and Product Life Cycle of the Vacation Rental
Management Industry in Sunriver, Oregon: A Microcosm into the Changing Industry"
Todd Montgomery
This research project dives deep into the life cycle and multiple disruptions of the vacation rental
management industry as whole, and specifically in Sunriver, Oregon. It uses primary research through
interviews of dozens of professionals in the industry along with secondary research to outline the
markets life cycle and disruption. It examines not only the life cycle but the various effects the
different phases have on the industry. It closely looks at the disruption of the industry in its growth
phase and how this caused an emergence of competitors that are now centralizing the market in its
maturity phase. Close inspection into Sunriver, Oregon’s maturity phase shows that the majority of
companies being bought out and going out of business are small, family-owned companies. Though
this is unfortunate by looking at a regular industry’s lifecycle, these companies are usually the first to
be consolidated during its maturity phase.
Key Words: Disruption, lifecycle, consolidation, competitors, technology, automation.
Corresponding email address: [email protected]
© Copyright Harley Coldiron
June 4th, 2020
The Disruption and Product Life Cycle of the Vacation Rental Management Market in Sunriver, Oregon: A
Microcosm into the Changing Industry
by
Harley Coldiron
A THESIS
submitted to
Oregon State University
Honors College
in partial fulfillment of
the requirements for the
degree of
Honors Baccalaureate of Science in Hospitality Management Honors Associate
Presented June 4th, 2020
Commencement June, 2020
Honors Baccalaureate of Science in Hospitality Management Honors Associate a project of Harley Coldiron
presented on June 4th, 2020
APPROVED:
_____________________________________________________________________
Todd Montgomery, Mentor, representing the College of Business-Hospitality and Business
_____________________________________________________________________
Pat Ball, Committee Member, representing College of Science-Microbiology and Oregon State Cascades
Honors College
_____________________________________________________________________
Griffin Priebe, Committee Member, representing Sunriver Resort Property Management
_____________________________________________________________________
Toni Doolen, Dean, Oregon State University Honors College
I understand that my project will become part of the permanent collection of Oregon State University, Honors
College. My signature below authorizes release of my project to any reader upon request.
_____________________________________________________________________
Harley Coldiron, Author
Acknowledgements
I would like to first thank Todd Montgomery, my mentor for guiding me through this process and
providing countless support and feedback. Todd was with me from the beginning and always took time
out of his busy schedule to assist me with anything I needed. He is a true professional, an excellent
teacher and mentor, and an overall great man.
Secondly, I would like to thank the many professionals that gave up their time to allow me to interview
them for this project. They always allowed me to bug them for any information or guidance that I
needed and provided me with countless tools and resources to research my thesis Their time,
perspective, and experience are what made this thesis possible. This includes David Madden, Griffin
Priebe, and Rob Bennington.
Lastly, I would like to thank Pat Ball the Honors College liaison for the Oregon State Cascades
Campus. He is the true embodiment of Bendite, and Cascades community, and the perfect man to head
the Honors College here at Cascades.
Table of Contents
Definitions.................................................................................................................................................1
Introduction...............................................................................................................................................2
Background and the Introduction Phase....................................................................................................3
The Industry as a Whole................................................................................................................3
Sunriver, Oregon...........................................................................................................................5
Cause of Disruption and the Beginning of the Growth Phase...................................................................6
The Industry as a Whole................................................................................................................6
Sunriver, Oregon...........................................................................................................................8
The Effect of Disruption- The Growth Phase............................................................................................8
The Industry as a Whole................................................................................................................8
The Arrival of Vacation Rental Software..............................................................8
Emergence of Acquisition, Technology-Based Vacation Rental Companies.......9
Closer Look at the Disruptors..............................................................................10
Table 1.....................................................................................................11
Sunriver, Oregon.........................................................................................................................13
Table 2.............................................................................................................................14
Table 3.............................................................................................................................17
Beginning of the Maturity Phase- Consolidation of the Market.............................................................18
The Industry as a Whole..............................................................................................................18
Sunriver, Oregon.........................................................................................................................19
Companies Adapting to Competition and Surviving the Maturity Phase...............................................21
The Future of the Industry.......................................................................................................................23
Overview of the Product Life Cycle........................................................................................................25
Graph 1........................................................................................................................................25
Table 4.........................................................................................................................................26
Table 5.........................................................................................................................................26
Recommendations and Takeaways..........................................................................................................27
Conclusion...............................................................................................................................................28
Work Cited..............................................................................................................................................30
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
1
Definitions
Vacation Property Management Company:
A vacation property management company in this research essay is defined as a company in
which the owners of a second home, allow the company to promote and sell their home as a vacation
rental during the periods they are not there. The company is responsible for cleaning the home before
and after, fixing and maintaining anything affected by the renters, advertising the home, and managing
the booking and guest. The company takes a percentage of the money received from customers
booking the home. The owners also receive a percentage of the bookings as they have allowed the
company to use their property for bookings.
Disruptor:
A disruptor in this research essay is defined as any company that enters the vacation rental
management market that has core foundational difference from the businesses already in the market.
These companies change the industry because of their differences and entered the market because of
they saw them as an advantages in the industry. Specifically, the differentiation is that they have
advanced and new technology and software that allows them to cut overhead, automate processes,
appeal to more consumers, and manage their prices. Their owners, founders, or executives have
backgrounds in these fields as opposed to traditional technology fields. The last biggest attribute of a
disruptor is that they look to expand to any geographic location that they can. They are able to do this
through their technology that allows for them to manage properties from anywhere and not needing a
physical location in that region.
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
2
Introduction
In this research project and case study we look at the entirety of the vacation rental
management market and then dive deep into a specific geographic area, Sunriver Oregon, to find the
similarities and differences of the changing industry. It also helps give a closer look at the life cycle
and disruption effects that cannot be seen on a larger scale. This research looks comprehensively at the
industry through its disruptions, product life cycle, and the effects they respectively have had. The
industry has vastly changed and been disrupted. The first time was due to the start of the internet in the
early 1990s which led to the ability to market and find vacation homes. It was more greatly disrupted
and impacted by the founding of Air Bnb in 2008. Air Bnb was a Silicon Valley, a technology
company that put the vacation management industry into the spotlight for software and technology
companies and employees. Hundreds of new companies sprouted up, using their advanced software
and technology to make processes more efficient, automated, and close service gaps. Their success
rooted in technology combined with millions in Silicon Valley investors allowed for rapid expansion,
buyouts of small companies, and consolidation of the market. This is where a huge change in the
industry happens as it has moved from small and local, family-owned businesses to large technology-
based corporations. The effects, though vast and unfortunate for small family owned companies, are
not unusual for the natural product life cycle. This project looks at how the disruptions play into a
normal product lifecycle and what possibly is next in store for the industry.
This research project will talk about the disruptions and product lifecycle phases of the industry
as a whole, followed by the same analysis for specifically Sunriver, Oregon. The idea is to see
specifically how these disruptions and lifecycle affect an individual area, rather than just as a whole.
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
3
The Industry as a Whole: Background and the Introduction Phase
The first recorded vacation rental was a Hunting Lodge called Palais de Versailles built by
Louis the XIII in 1624 (Lacaille, 2012). Throughout the 1600 and 1700s it became increasingly
popular for wealthy citizens to build vacation homes that they would then rent to wealthy friends,
politicians, and religious authorities. These respective people would contact the owners of these
vacation rentals through “snail mail” and would often have to wait weeks to hear a response back on if
they could rent their home. During the 1800s rich families in Europe and the United States built large
vacation homes in which they would split the time each member could spend in them every year, also
known as a timeshare. It should be noted that this term was not coined until the 1960’s in Switzerland
by Alexander Nette and his partner Dr. Guido Renggli and in France by Paul Doumier, who owned a
development company (Timeshare Consumer Association, 2014) (Schreier, 2005). There is some
debate about who invented the term and official idea first (Schreier, 2005). Nevertheless, having a
vacation home that was shared periodically by family members and friends became popular in the
1800s which can be attributed to the invention of the telegram in 1837, which made it easier for family
and friends to communicate. The popularity of newspapers in the 1950’s brought an increase in
homeowners and companies advertising their vacation rentals (Key Café Team, 2019).
The period of 1950 to mid-1980’s, the vacation rental industry was becoming increasingly
popular, especially with timeshares. People had larger disposable incomes due to economic growth and
manufacturing which led to more people traveling. Also, timeshare homes were sprouting all across
Florida, Hawaii, and California- primarily in the Lake Tahoe area (Canadian Vacation Ownership
Association, 2017) (Timeshare Consumer Association, 2018). There is a lot of information and
statistics on timeshares during this time because the industry as a whole was not professionalized and
thus information on the market size, revenue, and other statistics is impossible to verify. This is seen as
the introduction phase of the industry’s product life cycle. While the industry was growing it was still
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
4
very much in its introduction phase with low sales and very few competitors. It was mostly dominated
by one or two local, family-owned companies, that faced a thin profit margin.
In 1985, the Vacation Rental Market Association was created and several years later came the
first disruption and game-changer for the industry, the internet. Companies like Expedia,
Booking.com, and VRBO sprouted up using the internet to market, expand, and improve. These
companies utilized the accessibility of the internet to make it easier for consumers to find hotels and
vacation homes to book. They were immensely popular because of their easy booking capability and
their ability to market to all different consumer segments. In addition, the internet and these subsequent
companies were largely responsible for the growth phase of the industry’s lifecycle. The internet
allowed for more competitors to enter the market, higher sales, and less cost per customer due to
automation, technology, and software. With the ability to reach more audiences for less money and
labor, the overall mount of customers skyrocketed which is a big attribute of the growth stage of a
product’s lifecycle. Many of these companies are still successful today like Vacation Rental By Owner
(VRBO) which was first created with just one listing for a vacation rental home in Breckenridge,
Colorado (Vacation Rental Market Association, 2017). In 2020, twenty-five years later, the website
lists over two million vacation rentals properties (Vacation Rental By Owner, 2019).
In 2018, the vacation rental industry in the United States was compromised of 23,000
companies and 115,000 worldwide (Hostfully Market Study, 2018). The United States vacation rental
industry produced nearly 18 million dollars USD in revenue and 84 million dollars worldwide. The
industry today is largely revolved around technology to assist with pricing, revenue, distribution, and
workforce management (Shaulova & Biagi, 2020). In 2018, the market for software in the industry was
15.5 billion, about half of the actual industry as a whole, whose size is about 36 billion USD (Hostfully
Market Study, 2018) (Quinby et al., 2017). Today the industry is in the maturity phase and for some
segments of companies, in decline. The rest of this research paper will go in-depth about this.
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
5
Sunriver, Oregon: Background and Introduction Phase
Sunriver, Oregon is a planned residential and resort community in Deschutes County,
approximately nine square miles and nestled between the Central Oregon towns of La Pine and Bend.
It has a year-round population of 1,393 but during the busy summer seasons of the area, populations
are estimated to be anywhere from 6,000-10,000 according (U.S Census Bureau, 2010). It was
inhabited by indigenous tribes for 7,000 years, until settlers in the 1800’s began establishing a
community they’re because of the areas bountiful resources and vast areas to let their cattle graze
(Sunriver Chamber of Commerce, 2016). In World War 2 the government used Sunriver, Oregon as an
Army combat training facility called Camp Abbot because the climate and topography of the area
closely paralleled that of Northern Europe. It trained nearly 90,000 solders until the end of the war was
imminent. In June 1944, most of the Camp’s structures were destroyed except for the officer’s mess
hall which is now a part of Sunriver Resort and is called the Great Hall (State of Oregon Government,
2018).
In 1965 John Gray and Donald McCallum of Omark Industries started on their three-year plan
to create a luxurious resort that revolved around beautiful amenities and outdoor recreation called
Sunriver Resort. Today, the resort boasts over 300 hotel-style rooms, manages 300 vacation rentals,
has numerous food outlets, amenities, and activities based on the season and is an accredited, AAA
four-diamond property (Sunriver Resort, 2019) (American Automobile Association, 2019).
In the 1970s, property construction in the Sunriver area took off with 1,089 properties built and
continued into the 1980s with another 1,494 properties constructed. It slowed down a little bit in the
1990’s with 1,407 properties being assembled. Of the 4,622 homes, condos, and townhouses in
Sunriver, 86.33% of them were built from 1970-1999 (American Community Survey & U.S Census
Bureau, 2018). With so many homes being built in a vacation destination area in the late 1970s and
early 1980s the vacation rental management industry began in Sunriver, Oregon. The 1970s and early
1980s were seen as the introduction lifecycle phase of the local industry. Though there were lots of
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
6
second homes being built, the market and business concept was new and still small. Homeowners were
wary of allowing someone else to manage their new home and allow strangers to vacation their
(Barrett, 2019). In addition, due to advertising that relied on word of mouth, high costs for labor, and
the amount of time put into the business, the few family business owners saw little profit and had a
hard time expanding.
As previously stated, the majority of these second homes in Sunriver were built in the 1980’s
and 1990’s (American Community Survey & U.S Census Bureau, 2018). The entrance of the internet
during this time allowed Sunriver Resort and Sunriver as a town to become a widely known, premier
travel destination. Before, Sunriver was mainly a destination for people in the Pacific Northwest. Due
to the combination of these factors, Sunriver’s vacation management industry entered its growth phase.
The influx of people visiting the area convinced more people to turn their second home into a vacation
rental home. As a result, vacation rental management companies proliferated, though still small and
family-owned. The access of the internet and new software allowed for cheaper, widespread marketing
and more automated business procedures. Profitability and sales increased during this time, the amount
of labor and money put into an individual consumer decreased. As Sunriver Resort became
increasingly popular so did vacation rentals and the local industry continued to thrive during the
growth lifecycle phase (Bennington, 2019) (Barrett, 2019).
The Industry as a Whole: Cause of Disruption and the Beginning of the Growth Phase
The huge shifting point and disruption for the vacation rental industry were in 2008 when Brian
Chesky, Joe Gebbia, and Nathan Blecharczyk started a company called Air Bnb, based out of San
Francisco (Air Bnb Newsroom, 2019). Air Bnb is slightly different than a vacation rental management
company and can be closely compared to VRBO. While both of these companies feature vacation
properties rentals that are owned by the individual owners, Air Bnb and VRBO do not manage the
properties. They are a merely a distribution and marketing platform for these owners. The founding of
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
7
this company is collectively agreed upon as the starting point for another disruption of the vacation
rental industry. The factors attributed to this are that Air Bnb was a company based in new technology
and software. For example, Air BnB allows users to search through a wide variety of features including
ease of travel to the location and reviews of the actual property. Though it should be noted that VRBO,
now Homeaway, has largely adapted to this competition and offers similar features, it took many years
to do so. Lastly, though the basic ideas behind Air Bnb and VRBO were the same, Air Bnb utilized a
more user-friendly, comprehensive, and efficient platform than VRBO, which included the ability to
do things like rent spare rooms, guest houses, even a treehouse, and spare bedrooms. Whereas VRBO
specifically rented whole properties (Franklin, 2019) (Lodgify, 2020). This has resulted in Air Bnb
having vastly more listings and from more countries and regions (Air BnB Newsroom, 2019).
Air Bnb was based out of San Francisco, an area associated with the tech-boom and Silicon
Valley. The company was based on its advanced and comprehensive technology and software. Air Bnb
created an awareness of the vacation rental management industry in Silicon Valley and the tech
industry as a whole (Penn, 2017). Though Silicon Valley was affected by the Great Recession like
every other industry, it was still fueled by lots of money, investors. It saw a 13-15% increase in tech
jobs added during 2007-2011, in a time where most industries were rapidly losing jobs. The tech
industry and its investors, thanks to Air Bnb, saw the vacation rental management industry as a market
untapped and one that could be greatly enhanced by tech and software. It essentially put the industry
on the map for Silicon Valley and the whole tech market. Investors saw the market filled with various
business gaps in distribution, marketing, pricing, and revenue management that could be vastly
improved through technology and software.
The resulting disruption led to two main huge emergences; vacation rental software and
vacation rental companies based on their own software and technology. The difference between them
is that the vacation rental software companies are third party companies that license their software to
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
8
individual companies that manage vacation rentals. Vacation rental companies that emerged, relied on
their own new and innovative software and technology.
Sunriver, Oregon: Cause of Disruption and the Beginning of the Growth Phase
As we look into this case study of a small destination town, filled with vacation rentals I have
found the disruptions cause and effects are very similar to the larger industry. As noted in the previous
section, we see that the founding of Air Bnb brought the vacation rental industry to the light of tech
companies. They saw an untapped industry with gaps in the marketplace that technology could help
with. Talking to professionals and managers in the industry in Sunriver, they also stated the cause of
the disruption of their market was the start of Air Bnb. When asked about what he thought was the
biggest cause of the disruptors and the overall change in the industry, Rob Bennington, Owner of
Bennington Properties, said, “Airbnb of course has had the overall biggest impact to the industry in my
opinion (Bennington, R, 2019).” Other managers and professionals in the area also concluded that Air
Bnb showed the tech industry how big the industry was and is the main cause of companies like
Vacasa and TurnKey finding their way to the Sunriver. (Priebe, G, 2019 (Madden, D, 2019).
Industry as a Whole: The Effect of Disruption- The Growth Phase
The Arrival of Vacation Rental Software
After Air Bnb the tech industry saw not only an untapped market but one that could be greatly
strengthened by software that included price and revenue management, distribution, marketing, and an
overall platform for the company’s employees and their clients. This industry began to boom with
thousands of software and platforms emerging from the tech industry, primarily Silicon Valley. The
industries disruptions had created an industry half as large as the one it serves. In 2018 the market for
property management software was about 15.5 billion dollars USD, about half of the market size of the
whole industry which in 2018 was about 36 billion dollars USD. In fact, conservative averages
estimate that more than 5% of vacation rental management companies revenue is spent on this
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
9
software (Hostfully, 2018). Though some of today’s biggest software’s like Escapia, Booking.com,
started before Air Bnb and the disruption of the industry, thousands more sprung up since then whose
sole focus is on the vacation rental industry. Some of the biggest software’s pre-disruption era,
marketed vacation rentals, hotels, and resorts, whereas most of the new software’s focus solely on
vacation rentals. Looking at reviews of 2020’s top-rated vacation rental software, an average of 68% of
these companies started after 2008, which was when the industry saw Air Bnb (Capterra, 2020) (G2,
2020) (Software Advice, 2020). One of the biggest effects of the disruption was the arrival of a
completely new industry based around software and platforms for vacation rental industries.
The Emergence of Acquisition, Technology-Based Vacation Rental Companies
One of the biggest characteristics in the growth phase of a product lifecycle is the
materialization of more competitors and is exactly what we see at this point in the industry. Tons of
new companies started as a result of Air Bnb allowing the technology industry to see the service gaps
that could be remedied through software and automation. These companies have a vastly different
business model than the companies in the introduction phase of the industry’s lifecycle. The industry
had largely been dominated by local and family-owned companies. The types of businesses were based
locally, did not venture out to vacation rentals outside of their immediate area, and relied on word of
mouth and reputation. Their owners and managers usually have some sort of hospitality background
and the company focuses on customer service, close relationship with owners of the properties, and
usually have deep roots within the area. Though this seems antiquated, one must remember that before
the disruption, the vacation rental industry was relatively small, unnoticed by other companies, and
therefore untapped and non-competitive.
Vacation rental companies that started post have a background and business model much
different from pre-disruption era companies. These companies focused less on customer service and
their close relationships with owners and instead on distribution, marketing, revenue and pricing
management, and acquisition of vacation rentals regardless of location. In addition, the owners,
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
10
founders of these companies usually have a software, technology, or financial background, as opposed
to traditional hospitality experience. These disruptors use their own, or partner with other companies,
to offer innovative software to consolidate the different aspects of vacation rental management such as
marketing/distribution platform, owner and customer interface, and revenue management software.
(Table 1).
Closer Look at the Disruptors
The 6 biggest North American Vacation Rental Management Companies are all disruptors of
the industry. They are based on technology, acquisition, and have founders from a technology and data
background. Only one of the top 6 biggest North American Vacation Rental Management companies
were founded after 2008 and is still defined as a disruptor because of its founder’s experience, the
reason for starting the company, and its business model. The below chart lists in order the largest
vacation property management companies in the United States. It demonstrates that the biggest
companies today were founded because of a lack of technology in the industry and based on
acquisition, data, technology, and its founder’s experience in these fields.
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
11
Table 1
Looking Closer at the Industry’s Disruptors Business Model, Foundation, and Background
Company Year Founded
and Number of
Vacation
Rentals
Managed
Mission Statement/ Business
Model
Founders
Background
Why Company Was Started
Evolve
Vacation
Rentals
-2011
-Over 10,000
“Unlike other traditional (and
often inflexible) management
companies, we make vacation rental easy for everyone
involved.”
Brian Egan- Lawyer
for Silicon Valley
Startups
Adam Sherry- Sales
and Marketing, Revenue
Management for
Startups
“... Brian Egan and Adam Sherry founded Evolve
Vacation Rental in 2011, creating a tech-enabled
management solution...” -Evolve Company Website
Vacasa -2009
-8,000 in North
America over
25,000 worldwide
“Our AI-driven tools make it
possible to deliver this consistent
experience in unique vacation
homes around the world, from pricing our homes to scheduling
post-stay cleans.”
Eric Breon-Venture
Capitalist and Data
Analytics
“...found that the management companies on the
market lacked the marketing technology needed to
make renting a financial success. So, we decided to
manage the home ourselves.”- Eric Breon
TurnKey Vacation
Rentals
-2012 -4,100
“TurnKey provides guests with the consistency and quality of a
fine hotel experience, while
optimizing the management, marketing, and return on
investment for vacation rental
homeowners.”
John Banczak- Revenue
Management
T.J Clark-
Technology and
software for e-commerce
companies
“My co-founder, John Banczak, and I felt like there was a tremendous opportunity to develop a supplier
brand in the vacation rental space that addressed
this need for consistency, reliability and quality, just like we’ve seen in the hotel space.”- T.J Clark
iTrips Vacation
Property Management
-2008
-2,500
“iTrip Vacations property
management covers the entire rental process to ensure
consistent customer experiences,
which results in new and repeat visitors.”
Steve Presley- Real
Estate Developer
Todd Morrison- web
developer and consultant
Thomas Bissmeyer-Finance, Real Estate
Developer
“The whole idea was to bring technology to a very
fragmented industry that needed help” Steve Presley
VTrips
Property Management
-2006
-2,000
“The Internet dominates
consumers' search for rental properties, and we are experts at
search engine optimization and
social media. “
Steve Milo- Internet
marketing
“I got into this business because I was dissatisfied
with the way my own rental property was being managed. With my background in internet
marketing, I knew I could do a better job of it”-
Steve Milo
Pillow Property
Management
-2013
-2,000
“We leverage technology & big
data to build the worlds #1 hospitality platform for short-
term rentals.”
Sean Conway and
Justin Miller- Angel Investor for
technology and
software startups
“We experienced first-hand the need for a way to
automate marketing, guest management, key exchange, and turnover.”
-Sean Conway & Justin Miller
Note. Information for Pillow Property Management from Pillow Homes Inc (2020). Information from Vtrips Property Management from VTrips (2020). Information for iTrips Vacation Property Management from iTrip LLC (2020) and iTrip® Your Vacation Destination (2017). Information for Turnkey Vacation Rentals from
Turnkey Vacation Rentals Inc (2020). Information for Vacasa from Vacasa LLC (2020). Information for Evolve Vacation Rental from Evolve Vacation Rental (2020) and Egan, B and Sherry, A (2019).
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
12
From the above table, we can see that these 6 biggest companies in the industry, all of which
are disruptors, were started because they saw tech and software seeing as an opportunity to fill the gaps
in the market. We can conclude this through their mission statements and business models, owners
quoted reasons for starting the business, and the founder’s backgrounds. It’s incredible to see that the 6
biggest companies in this industry are all disruptors. In addition, only one of the top six biggest
vacation property managers, Vtrips, started before the disruption era in 2008. Though it should be
noted that Vtrips is defined as a disruptor because of its business model of technology, its owner
having a background in web development and quoted as starting Vtrips because of this experience and
his perceived need for it in the industry. In 2020, the 6 biggest companies, all of which are disruptors
manage more than 25,600 vacation rentals in North America, most of which were formerly managed
by pre-disruption companies. The simple fact that the six biggest companies in the industry can be
categorized as disruptors, shows the magnitude of how much the industry has changed due to being
noticed in the technology industry because of Air Bnb.
Though the disruption had been vast, this is not unusual for an industry’s lifecycle. During the
growth phase a large number of competitors enter the market because they see an opportunity to
improve the industry. These new competitors/disruptors enter the market and have lower costs
associated with consumers and ultimately higher profit margins. The same cycle happened in this case,
as the disruptors above had the technology, software, and expertise to cut costs, automate, and thus
improve the efficiency of the industry. More consumers entered the market and more profit combined
with low overhead, led to rapid expansion and the beginning of the industry’s maturity phase.
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
13
Sunriver, Oregon-The Growth Phase
Just like the industry as a whole, Sunriver’s vacation rental management industrys largest effect
of the disruption was the entrance of technology, acquisition-based vacation rental management
businesses. Here we see the growth phase take off in Sunriver, as the amount of vacation rental
management companies doubled. Sunriver went from having around 6-8 small family owned
companies to more than 14. These companies, just like the ones that have disrupted the entire industry,
saw a gap in the marketplace that could be closed with technology that its owners and founders have
experience in. In fact, three of the five disruptors of Sunriver; TurnKey, Vacasa and Evolve, are in the
top 6 biggest vacation rental management companies in North America. They are talked about in the
previous section “Closer Look at the Disruptors.” This demonstrates how immensely widespread and
effective these disruptors have been in acquiring properties from all markets.
While the other three disruptors are not one of the six biggest vacation rental management
companies and disruptors, they are in fact major disruptors of Sunriver’s market. These companies are
defined and can be shown exactly like the other disruptors due to why they were founded, who they
were founded by, and their business model.
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
14
Table 2 Looking Closer at Sunriver’s Disruptors Business, Model, Foundation and Background
Company Year Founded and Number of Vacation Rentals
Mission Statement/ Business Model Founders/ Executives Background
Vacasa -2009 -228 in Sunriver -25,000 worldwide and 8,000 in North America
“Our AI-driven tools make it possible to
deliver this consistent experience in unique
vacation homes around the world, from
pricing our homes to scheduling post-stay
cleans.”
Eric Breon (Founder)-
Venture Capitalist and
Data Analytics
Arrived LLC. -2004 -55 in Sunriver -193 Total
“Our state-of-the-art rental management software means you’ll always get complete and accurate information about your property.”
Rich Marine (CEO)- Information Technology and Services
Turnkey Vacation Rentals
-42 in Sunriver -4,100 in Total
“TurnKey provides guests with the
consistency and quality of a fine hotel
experience, while optimizing the
management, marketing, and return on
investment for vacation rental
homeowners.”
John Banczak (Founder)-
Revenue Management
T.J Clark (Founder)-
Technology and software
for e-commerce
companies Meredith Lodging
-32 in Sunriver -680 Total
“Meredith Lodging is an industry leader in its adoption of advanced reservation software, search engine optimization, advanced rate algorithms and 3-D technology to make homes and vacation opportunities easy for customers to find.”
Jon Oksenholt (Founder): Real estate investor and development
Evolve Vacation Rentals
-9 in Sunriver -Over 10,000 Total
“Unlike other traditional (and often
inflexible) management companies, we
make vacation rental easy for everyone
involved.”
Brian Egan (Founder)-
Lawyer for Silicon
Valley Startups
Adam Sherry (Founder)-
Sales and Marketing,
Revenue Management for
Startups
Note. Information for Evolve Vacation Rentals from Information for Evolve Vacation Rental from Evolve Vacation Rental (2020) and Egan, B and Sherry, A (2019).
Information for Meredith Lodging from Meredith Loding (2020) and Oregon Business (2019) and Oksenholt Companies (2020). Information for Turnkey Vacation Rentals from Turnkey Vacation Rentals Inc (2020). Information for Arrived LLC from Arrived LLC (2018) and Marine, R (2019). Information for Vacasa from
Vacasa LLC (2020).
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
15
As we can see from this table all five of these disruptors’ founders have a background unrelated
to hospitality. Four out of five of the disruptors founders or CEO’s have a background related to data,
analytics, and or technology. This table shows these disruptors foundations don’t have a hospitality
background and are rooted in the technology and analytics that they use for their revenue management,
pricing, marketing, and owner/user platforms. From this information, we can conclude that these
disruptors revolve their business around their innovative use of technology, software, data, and the
combination of all three. (Table 1 and 2).
The purpose of examining the industry as a whole and then specifically Sunriver is to be able to
examine and analyze aspects of the industry’s lifecycle that cannot be found just by looking at the
whole industry. We can see that both Sunriver and the whole industry entered the growth phase at this
time and saw an emergence of new competitors. Yet, we cannot closely compare and contrast them to
the original, introduction companies unless we look at specific market like Sunriver. Below is table
that shows the non-disruptor companies in Sunriver. The year founded, mission statement/ business
model, and founder/ executive background demonstrates the reasons why they are not disruptors and
the difference between them. All, except Sunriver Resort are family-owned, and all companies’
executives/ founders have backgrounds in property management, hospitality, or a combination of both.
Another distinguishing factor from the disruptors and non-disruptors is locality. We can also see from
their mission statements and business model, they focus on older more core aspects of hospitality and
property management such as customer service, close relationships, and community. The disruptors on
the other hand have mission statements and business models rooted in their technology through
revenue management, distribution, and marketing platforms (Table 1 and 2).
Lastly, all of these companies have offices in Sunriver, Oregon and all are managing vacation
rentals solely in Deschutes County area and are not looking to expand. This is vastly different than the
disruptors, all of whom manage properties in other areas. In fact, all five of the disruptors manage
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
16
properties not only over the state of Oregon but all-over North America, with Vacasa managing
properties internationally as well. (Table 1).
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
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Table 3 Looking Closer at Sunriver’s Introduction Phase Vacation Rental Management Companies
Company Year Founded and Number of Vacation Rentals
Mission Statement/ Business Model Founders/ Executives Background
Sunriver Resort
-300 vacation rentals managed -Founded in 1998
THE MARKET LEADER: More owners have chosen us to manage their vacation rental property than any other company in Sunriver!
Griffin Priebe (Property Management Director)- Property Management, Vacation Rentals, Hotel Operations
Bennington Properties
-200 vacation rentals managed -1998 -Family Owned
“To build and deepen our co-worker, customer, and community relationship; serving them with Bennington Ho’okipa.” -Mission Statement
Robert Bennington (CEO and Owner)- Vacation Rental Management, Professional Housekeeper
Cascara Vacation Rentals
-95 vacation rentals managed -Founded in 1983 -Family Owned
“Cascara Vacation Rentals is a vacation home management company located in beautiful Sunriver, Oregon. Our staff has been in the vacation management business for decades and is always ready to help both owners and guests make the best decision.” -Mission Statement
Ed Willard- Vacation rentals, property management Sandy Willard- Housekeeping business owner, reservations and bookkeeping
Sunset Lodging
-90 vacation rentals managed -Founded in 1985 -Family Owned
“We strive to provide a legendary service and a quality product. Our goal is to exceed customer’s expectations.” -Mission Statement
Scott Pence (Owner)- Property Management, Housekeeping, Reservations, Maintenance
Village Properties
-84 vacation rentals managed -Founded in 1985 -Family Owned
“To provide a quality lodging and real estate experience using sophisticated procedures, executed by local employees and family, with honesty, integrity and a sense of community.” -Mission Statement
Mark Halvorsen (Owner)- Long term property management, Real Estate
Note. Information for Village Properties from Village Properties at Sunriver (2018). Information for Sunset Lodging from Sunset Loding in Sunriver (2020). Information for Cascara Vacation Rentals from Cascara Vacation Rentals (2020). Information for Bennington Properties from Bennington Properties LLC and Bennington, R (2019). Information for Sunriver Resort from Sunriver Resort (2020) and Priebe, G (2019). Information from Sunriver Resort from Destination Hotels (2020).
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
18
From this table, we can see that these pre-disruption companies value customer service, roots in
the local area, and have experience in the hospitality industry. They are mostly all small companies,
family-owned, looking to expand solely in the local area. This is commonplace during the growth
phase of any industry, as the entrance of more competitors in the growth phase is because they see
something the industry could use or improve on. The point is that this is not unusual and a natural
occurrence in an industry’s life cycle to see an emergence of competitors that are different. (Table 3).
Just like the market as a whole, the effect of vacation rental management industry’s disruption
in Sunriver has led to emerging competitors that have a different platform and business model than the
rest of the industry. After Air Bnb turned the spotlight on the industry for professionals in the tech and
data industry, both Sunriver and the entire industry saw the growth phase of the industry gain steam.
These large amounts of new competitors entered Sunriver’s marketplace using new and effective
marketing, data, distribution, and revenue management technology and software to succeed in the
industry. This has allowed them to be very successful and profitable in Sunriver as they have been able
to cut down on labor and manpower (Madden,2019) (Priebe, 2019) (Bennington, 2019). This is very
different than the vacation rental management companies that previously dominated Sunriver’s market
during the introduction phase. (Table 1) (Table 2). As more competitors, with different business
models entered Sunriver’s market and became more popular and profitable, the beginning of its
maturity phase began.
The Industry as a Whole: Beginning of the Maturity Phase- Consolidation of the Market
Due to the disruption effect of companies rooted in technology and backed by big tech money
entering the industry, the industry has begun to enter the maturity phase as smaller, traditional, mom
and pop companies are being bought out.
The perfect example of this is Vacasa, who is a disruptor, and the biggest vacation rental
company in the world and second in North America. Since its founding in 2009, it has acquired 33
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
19
vacation rental companies. Twenty five of the companies they have acquired managed 100 or fewer
properties. Of those 25 companies acquired, 11 managed less than 50 properties. These 25 companies
can be defined as small and all were locally owned. This means that over 75% of the vacation rental
companies Vacasa has acquired are small, locally owned companies. In addition, 30% of them are
extremely small, managing less than 50 vacation rentals (Crunchbase Inc., 2020).
Another example is vTrips, the 5th biggest vacation rental management company in North
America and also a disruptor. Of the six companies they have acquired in their tenure, two of them
managed less than 100 properties. Though, at lower rate and quantity than Vacasa, one third of these
buy outs where from small, locally owned companies. (vTrips About Us, 2020).
These are just a few cases of many that show one of the results of the disruption is the large and
consistent acquisitions of small, locally owned vacation rental management companies. Though,
unfortunate and sad for these companies, a regular industry’s lifecycle eventually reaches the maturity
phase which is defined by the consolidation of the market. At this point in an industry’s lifecycle the
new competitors that entered during the growth phase begin to push out the introduction phase
businesses that have not adapted. They do this through either through buying them out or letting them
go out of business. The disruptors that entered the market in its growth phase like Vacasa, have
become more successful with a lot more assets and profit due to their different business model and
have subsequently begun consolidating the market.
Sunriver, Oregon: Beginning of the Maturity Phase- Consolidation of the Market
As defined in this case study, disruptors not only have a foundation and background rooted in
something other than property management and hospitality but also have business model of acquisition
and growth. On a larger scale, we have shown that disruptors business goals are to acquire as many
vacation rentals possible through expanding to untapped locations where introduction phase companies
still dominate the market (Table 1). The same is true for the disruptors in Sunriver. All five of them
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
20
have properties all over North America and in one case, internationally. Two of the five of, Evolve and
Turnkey, don’t have a physical office in Deschutes county, whereas all five of the pre-disruption
companies have offices specifically in Sunriver. Just like the disruptors of the market as a whole, these
companies are focused on expanding and acquiring vacation rentals. At the same time, they have also
been largely more successful and profitable than the introduction phase companies. As a result,
Sunriver at this time also began to move from its growth phase into the maturity phase. The result of
this has led to a lot of small, family owned companies in Sunriver to be bought out and taken over.
Meredith Lodging is one of Sunriver’s five disruptors and since its founding in 2015 has
acquired more than 12 companies all over the United States. One of those acquisitions was Vacation
Station, a small family-owned vacation management company in Sunriver, Oregon. In addition,
Vacasa has purchased over 33 companies one of them being Discover Vacation Rentals in Sunriver.
This was a family owned, local business that managed over 100 properties and allowed Vacasa to
double its vacation rentals in Sunriver. Lastly, Arrived LLC, a Sunriver Disruptor has acquired three
small vacation rental companies since its founding and has expanded to Washington, California, and
Hawaii. From acquisitions in Sunriver alone, these five disruptors have acquired nearly 200 properties.
In total, these five disruptors manage over 400 vacation rentals that normally would be managed by
one of the five local, pre-disruption era companies. They control about 37.5% of all vacation managed
properties in the Sunriver area. This means that in a matter of 11 years, these disruptors have been able
to take nearly 40% of the market share in Sunriver alone. They have been able to do this through their
different business model and foundation in automation, technology, and expansion. This shows that the
widespread dominance and corresponding consolidation of the market by these disruptors, has not only
changed the landscape of the entire market but Sunriver specifically as well. Sunriver as a historic and
widely known vacation destination has not been immune to the effects of the maturity phase as
disruptors have taken large amounts of the market share.
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
21
Companies Adapting to Competition and Surviving the Maturity Phase
One of the biggest downsides of a free market and a capitalistic economic system is that when
an industry reaches the maturity phase, it almost always means that small, family owned businesses are
the ones that are going to go under or be taken over. This is no different with the vacation rental
management industry. Yet, something that we cannot see by looking at the industry as a whole and
only through the case study of Sunriver, are the introduction phase companies that will survive along
with the disruptors.
Two of the introduction phase era companies in Sunriver; Sunriver Resort and Bennington
Properties have had to adapt to the new market and done it successfully. The market during the growth
phase saw five companies with different business models, new technology and software, and
executives and founders with different experiences enter the market. These five disruptors during the
maturity phase have taken up almost 40% of the market share in a matter of a decade, severely hurting
the bottom line and number of rentals these companies could have possibly managed. Both Griffin
Priebe, Director of Property Management for Sunriver Resort, and Rob Bennington, CEO and Owner
of Bennington Properties, have said that while the disruption has hurt their companies it has been good
because it has made them adapt to the changing industry. Both companies have instituted new revenue
management software that change rates every day based on competitor pricing, weather, peak season
versus slow season, and many other variables. Many of these disruptors were able to emerge and be
successful because of revenue management software and tools. This allows them to maximize revenue
and occupancy not only for themselves but for their owners, which is a big reason they have been able
to expand at such rapid rates. Bennington and Sunriver have done the same to make them more
competitive. Both companies expressed that they have expanded their marketing platforms to include
websites like Air Bnb and Homeaway, something that disruptors had been doing and gave them an
advantage in bringing in more renters. Griffin Priebe acknowledged that Sunriver Resort and fellow
introduction era companies were not up to date in terms of technology and this is what allowed these
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
22
companies to come in and take a market share. This happens to any industry during its growth phases,
new competitors that enter, enter because they see ways of improving the market. Though, he said that
while their large portion of the market in Sunriver is unfortunate, competition is always good and has
forced them to be more up to date in terms of the technology, platforms, and software they use.
Something both company executives noted in this new Sunriver market is the need to
sustainably differentiate themselves among the disruptors. Sunriver Resort for example has undergone
a total transformation and revamp of their brand and marketing. Griffin Priebe discussed how two
former Nike Marketing Executives helped them mold their new brand.
Rob Bennington on the other hand has not changed their brand but has focused on a different
aspect of the industry, housekeeping. He has expressed willingness to sell his company to one of these
disruptors or possibly the model he uses for housekeeping. Rob Bennington himself is a professional
housekeeper and has developed a system and procedures that lead to excellent and efficient
housekeeping. He has thought about possibly starting a housekeeping company or consultancy that
could partner with these disruptors like Vacasa and help them develop housekeeping procedures and
systems. (Bennington, 2019).
These two companies have and will be able to survive along with the disruptors because they
adapted quickly and had enough assets to help them maintain as they changed. In addition, they had
enough assets and funds to be able to acclimate to the new technology and software that gave the
disruptors an advantage. This is not true for the three other introduction phase Sunriver companies.
They simply don’t have the money to take on expensive technology and changes. Thus, I think
eventually they will go out of business or be bought out as the maturity phase continues. It is a sad
reality but commonplace during any industry’s life cycle. In essence, we can see from an examination
of Sunriver that the companies that will survive the maturity phase will be the ones that are financially
and adequately able to adapt.
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The Future for the Industry’s Maturity Phase
The fact of the matter is for these smaller companies, highlighting your local roots, partnerships
with other local businesses and the community will only take them so far in this new marketplace.
These disruptors are attracting owners because of their new technology, software, and marketing that
increases revenue for them. While, guests are attracted to the lower prices offered which they can do
through excellent pricing management technology and being able to do different aspects of the
business remotely, and thus more cost effective. Talking to a lot of these companies in Sunriver many
said they simply don’t have the capital to invest in all the technology that these disruptors have. These
disruptors come from and have rooted their company in technology and thus are able to raise large
amounts of capital that these smaller companies can’t compete with. Vasasa in 2019 only raised 319
million dollars from mostly Silicon Valley and other tech areas. This means they have loads of capital
to invest, not only invest in technology that smaller businesses can’t, but offer buyouts to these
companies that simply doesn’t make sense to turn down. Even with differentiating themselves from
these disruptors, these small, mostly family owned businesses won’t have the assets to invest and
compete with disruptors. The growth phase showed that these new business models are popular for
consumers and highly profitable. 37% of Sunriver’s market share has already been taken over by
companies with these new business models and the industry’s top 6 leaders all emerged in the growth
phase. This shows that I don’t think differentiation will elude them from market consolidation and are
most likely to go out of business or be taken over.
We have seen two small, local and family owned businesses get bought out in Sunriver by
disruptors already. Robert Bennington and Griffin Priebe, of Bennington Properties and Sunriver
Resort respectively agree with this expectation that these buyouts will continue as the market continues
to change and consolidate (Bennington, R, 2019) (Priebe, G, 2019). In fact, one disruptor’s owner, Jon
Meredith of Meredith Lodging has actively been looking to buyout another Sunriver vacation rental
management companies.
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
24
Looking at the what disruptors and introduction era vacation rental management companies are,
we can assume that this trend of small and local companies is most likely to be bought out at all
locations across the country. As long as disruptors continue to enter locations like Sunriver, we can
conclude that the family owned companies that we see in Sunriver will most likely be bought out. Just
like in Sunriver, it is safe to say these companies won’t have the capital and consequently the ability to
adapt and compete and adjust to the disruptor’s competition. Disruptors, just like in Sunriver, will have
a competitive advantage and a capital advantage to pursue buyouts of these small, local, and most
likely family owned businesses. We can assume that this trend in Sunriver is going to continue in
another destination areas like Sunriver.
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
25
Overview of the Product Life Cycle
Graph 1
The Product Lifecycle
23
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
26
Table 4
Overview of the Whole Industries Product Life Cycle
Introduction Phase
Growth Phase Maturity Phase Product Extension Phase
• Though the industry has
been around for thousands
of years in some capacity,
Americans started buying
second vacation homes to
the economic prosperity
post World War 2
• As travel becomes more
accessibly throughout the
1970’s-1980’s the industry
grows
• The industry begins
to take off due to the
entrance of the
internet, software
and technology in
the early 1990’s
• Air Bnb starts in
2008 shedding a
light on the market
of vacation rental
management to the
technology and
software world
• Companies started
by former tech
employees sprout up
looking to close
service gaps through
technology software
and automation
• Backed by big
Silicon Valley
investors, companies
big buying out small
companies all over
the nation,
consolidating the
market
• Disruptors now
manage over 25,000
properties buying
hundreds of rentals
• The top six biggest
rental management
companies are all
disruptors started
post Air Bnb-2008
era
• Pre COVID-19 the market
was headed for an extension
due to the popularity of the
market and younger traveling
demographics using rentals
instead of hotels
• Currently the market is in a
decline due to economic
conditions caused by
COVID-19
• COVID-19 could strengthen
the products life cycle as
people are less likely to use
hotels
• The industry after COVID-19
is in nowhere near decline,
will have a long maturity
phase
Table 5
Sunriver, Oregon’s Product Life Cycle
Introduction Phase Growth Phase Maturity Phase Product Extension Phase
• Sunriver is developed as resort community in 1965
• During the 1970’s-80’s 3,000, mostly second vacation homes of wealthy families are built
• Small, family owned vacation rental companies appear
• Sunriver becomes a premier worldwide destination and the emergence of the internet, the industry begins to grow
• Air Bnb is introduced in 2008 and sheds new light on the technology industry which forever disrupts the market • The tech industry starts new vacation rental management companies by closing service gaps through technology, software and automation
• 5 disruptors enter the Sunriver market taking about 400 rental properties and over 37% of the market
• Small, local family owned businesses are bought out by disruptors and go out of business due to much smaller market share
• Currently the market is in a natural decline due to the economic climate
• Before COVID-19 the industry was bound for product extension due to growing demographics tendency to rent homes and condos rather than hotel rooms
• Regardless, the market will be extended and possibly strengthened due to COVID-19 and be less likely to stay in hotels
• Possibility of going through another life cycle and consolidation more
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
27
Recommendations and Takeaways
The main takeaway one can see from this industry is the idea of being proactive versus
reactive. Throughout this report one can see that the vacation rental industry was very reactive to the
disruption as opposed to proactive. Yet, we must look at the other industries that were bound to be
affected by technology. Some industries have inexplicable and indefinitely suffered from technology
and software such as video rentals stores. Blockbuster was the largest video rental shop company in the
world, at its height having 9,000 stores, 90,000 employees worldwide and worth five billion dollars.
This was an industry that was obviously and considerably going to be disrupted as technology allowed
for online video streaming services. Yet, this industry did not adapt and has mostly been decimated,
with its largest company Blockbuster, filing for bankruptcy in 2010. This was just 6 years after it was
at its peak in terms of stock price, and number of stores and employees. Though, the hospitality and
vacation rental management industry were not proactive in adapting and preparing for how technology
could disrupt the industry, in comparison it is vastly unscathed compared to an industry like video
rentals. Though video rentals stores were clearly going to be more disrupted by technology than
vacation rental management, they were unprepared and reactive, eventually leading to their industry
being taken over by online streaming technology.
That being said, the industry could learn from this by taking on a more proactive approach to
market changes. Talking to owners, CEO’s, and executives in the field in Sunriver, most mentioned
three reasons why the industry is so reactive. The first, which was mentioned first by everyone is that
the industry has done things the same way for a long time and been successful in doing so. This is
because before 2008 and AirBnb putting it on the map for tech companies, the industry had largely
been unaffected by technology and generational changes. The industry continued to grow especially in
the mid 1980’s as the economy boomed giving more people disposable incomes, leading to more
travel. American employed workers also started taking more vacation days, an average of 21 days. The
professionals I talked to said this helped fuel the idea that the way things were being done in the
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
28
industry, were the right ones. Secondly, these professionals all talked about the idea of the industry
revolving around people through their clientele and employees. It is a service industry that unlike other
industries relies heavily on people and labor. This has perpetuated the industry being reactive as people
are naturally stringent to change and, in an industry, dominated by people, brings an greater resistant to
change.
Changing the industry from being reactive to proactive would not have stopped the disruption,
as it was inevitable and fueled by companies with large Silicon Valley investors but could have been
contained. It is also natural as we can see from a normal product lifecycle. If these companies had
realized the importance of technology and software, they could have incorporated it into their business
model. This would not have stopped all buyouts for smaller companies but would increase the price
disruptors would have to pay for buyouts. Though this is a hard thing to change, Griffin Priebe,
Director of Property Management at Sunriver Resort, notes that this disruption has made them adapt to
the competition and get with the times. He also notes that it has been a wakeup call for him and the
industry in terms of seeing where the industry can go and be improved by something like technology.
It has made them more proactive instead of waiting for competition and being reactive.
Conclusion
The vacation rental management industry has gone through many changes throughout its
product life cycle. It started out almost seventy years ago as just a couple of homes in travel
destinations that were rented out to friends and families. Slowly, as manufacturing and construction
thrived in the United States lots of seconds homes were built in these areas. This combined with the
accessibility and affordability of travel allowed for increasing popularity in the industry, that at this
time was dominated by small, mom and pop companies. The entrance of the internet turned the
industry into its growth phase as it became easier to book and new technology and software made these
companies more automated. The industry began to thrive but hit its stride during the growth stage
when Air Bnb was started in 2008 shedding a light on the market to tech companies. These tech
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
29
companies and employees saw service gaps that could be filled with new software and technology.
Tons of new competitors entered the market and with more automation and lower overhead, these
companies flourished. This began the maturity phase as these companies started taking over markets,
buying out the original small, mom and pop companies and also putting them out of business.
Currently, the industry is still in its maturity phase and will have a long-life cycle before declining.
Though, the disruptions and buyouts of small businesses is sad, we can see from a normal product life
cycle this is normal. The fact is these original, introduction phase companies didn’t adapt enough to
technology and also didn’t have enough capital to make a smooth transition, to stay alive during the
maturity phase. Many other industries have been decimated by technology and relatively speaking the
industry did fairly well during the maturity phase. Though the changes to the industry have been
dramatic from top to bottom, starting with its business model all the way to the customer experience, it
is not unusual and quite natural for an industry.
VACATION RENTAL MANAGEMENT PRODUCT LIFE CYCLE
30
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