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The Vacation Rental Homeowner's Gulf Coast Report:

Why the Oil Spill Doesn't Have to Be
a Deal-Breaker for Travelers

By Christine Karpinski
www.HomeAway.com

       If you own a vacation home on the Gulf Coast and are worried sick about your rental income, take heart. A recent survey indicates that plenty of travelers are still headed your way this summer - and Christine Karpinski explains how you can win their business.
       As oil continues to plume relentlessly into the ocean, the entire Gulf Coast is bracing for impact. And if you're one of the estimated 150,000 people who own vacation rental property in the area, you've never been more worried about the future. Will anyone want to take a vacation to a beach that might be coated with oil? you can't help but wonder. Will the people who've already booked for this summer want to cancel? And is there anything I can do or say to change their mind?
       Actually, says Christine Karpinski, the news may not be as bleak as you're imagining. A survey commissioned by Beaches of South Walton found that the disaster isn't leading most return travelers to abandon their plans to come to the Gulf Coast this summer. And as for all the people you assume have decided to vacation elsewhere - well, many of them haven't made their reservations yet and are therefore still in the running.
       "The results of this survey should offer hope to homeowners," says Christine Karpinski, director of Owner Community (www.OwnerCommunity.com) for HomeAway(r) (www.HomeAway.com - an online vacation home rental marketplace) and author of How to Rent Vacation Properties by Owner, 2nd Edition: The Complete Guide to Buy, Manage, Furnish, Rent, Maintain and Advertise Your Vacation Rental Investment (Kinney Pollack Press, 2007, ISBN: 0-9748249-9-2, $26.00). "It indicates plenty of vacationers are planning to come to the Gulf Coast - even if the worst-case scenario happens."
Karpinski has a very personal stake in this subject. Not only is she deeply connected to Gulf Coast homeowners through her job, she herself owns vacation rental property in the area. She says getting traveler feedback like that communicated via the survey results helps her get a handle on where to go from here.
       "It's better to know something concrete than to be left completely in the dark, wringing your hands and imagining the worst," she reflects. "When you can get a feel for what the real picture is, you can take steps to respond constructively. And I think that's what this survey does: it provides real data I can get my hands around - and also share with other vacation rental homeowners."
       Titled Gulf Oil Perception Study, the survey was conducted via phone interviews with vacation decision makers who had visited Beaches of South Walton (BSW) in June or July of 2009. Respondents were asked a series of questions relating to their travel plans for this summer (2010) - including questions on whether they plan to return to BSW, their reasons for "no" responses, their perceptions regarding the oil spill, their anticipated reaction to oil on the beach, and more.
       Here are few of the results:

Most summer '09 visitors plan to come back. Among those who plan to travel somewhere this summer, 62 percent say their plans include Beaches of South Walton. About 35 percent say their plans do not (for various reasons). Currently, only 5 percent have excluded BSW from consideration because of the oil spill.
Many people are making reservations later. Among those planning to travel to BSW this summer, 54 percent have already made their reservations. That leaves a full 46 percent - just under half - still waiting to do so. While some say they will make their reservations within the next few weeks, just as many will make them a month or more from now.
The oil spill isn't a deal-breaker. Three out of ten of those who plan to travel and four out of ten of those who have already made reservations say they will still come to visit BSW this summer even if the oil impacts the beach.
"On the fence" travelers can be convinced. One out of four suggested on an unaided basis that "discounted accommodations" would bolster their travel intentions and commitment to BSW.
"To me the implication is clear: the oil spill isn't necessarily a deal-breaker," says Karpinski. "It seems plenty of people are still coming to Gulf Coast beaches; they just haven't booked their vacations yet. And really, that's not surprising when you consider it in light of travelers' overall behavior patterns. Over the past five to ten years, that's been the clear trend - people are just waiting longer to book their vacations.

       "In other words, homeowners should not assume people are dragging their heels only because of the oil," she adds. "And don't write them off yet. Remember, Florida is the biggest travel market in the U.S. - millions of people go there every year - and peak season is just beginning. Your job is to do everything you possibly can to improve the odds that travelers who are part of that 46 percent of 'late bookers' will call you."
HomeAway is doing its part, she says: the company is stepping up its advertising of the area and also teaming up with tourism boards in an effort to provide website visitors with up-to-date information on the state of Gulf Coast beaches. But it's up to property owners to be their own best advocates.
       "I suggest you take a two-pronged approach," says Karpinski. "First, do everything you can to reassure the guests who've already booked with you, and second, do everything you can to procure new bookings."
       Here's how:

Ratchet up communication with customers. If you're like many Gulf Coast property owners, you're understandably nervous about what customers and potential customers are going to ask you. Your inclination is to get off the phone as quickly as possible - or better yet, stick to email. Resist that urge, says Karpinski. It's more important than ever to spend time directly assuaging their worries (without giving them false expectations or information). Be patient and give them all the time they need to feel comfortable with their decision.
"Transparency and accessibility are reassuring," she says. "When you're hard to get in touch with or reluctant to talk, people think you have something to hide. Consider reaching out to customers who've already booked with you to give them beach updates or to let them know your discount/refund policies. At the very least, be ready and willing to field their questions if they call with concerns. Don't rush them off the phone."
Talk up your home and the surrounding area every chance you get. Directly address the condition of the beaches, assuring guests that at this point they're still clean and beautiful. Post current photographs of the white sands and pristine waters. You might also encourage renters to send up-to-date photos and write glowing reviews. But don't stop there. Talk up the area's other attractions: great restaurants and fabulous shopping, the new Northwest Florida Beaches International Airport with inexpensive Southwest Airlines flights, or the beautiful pool at your condo.
"In the past you may have assumed that your property 'spoke for itself,' but for the time being, at least, that reality has changed," says Karpinski. "It's time to become a more assertive salesperson. If that feels uncomfortable at first, don't worry - with practice it will get easier."
Have some "key words" at the ready. If you're not sure what to say when rental customers ask you questions - if you hesitate or stammer or fumble for words - they'll assume the worst. Karpinski's suggestion: take a cue from the Boy Scouts and be prepared with "scripts" you can pull out as needed.
"Many Gulf Coast chambers have been providing their members with talking points to send a consistent, well-thought-out message," she observes. "You might consider calling or visiting the website of the chamber or tourism board where your property is located and see what they're saying - and use those same key words with your guests. This is a smart practice that gives you confidence and calms any jitters your guests may be experiencing."
Incentivize! If there were ever a time to pull out all the stops, that time is now, notes Karpinski. Offer free beach service, knock off the cleaning fee, offer a "buy six nights and get the seventh free" promotion, throw in a gas card or free meal or discount attraction ticket - anything and everything you can do to capture those not-yet-booked vacationers.
"Maybe you're already doing some of these things but not advertising them," she says. "It's time to change that. Right now your job is to make your rental property as attractive as possible, and you know what? Sometimes it's the little things that push people one way or the other in their decision-making."
Loosen up your refund and cancellation policies. Perhaps in the past you've maintained fairly stringent rules regarding refunds and cancellations. That's understandable: no one wants to accept a June booking in January, only to have the guest cancel on a whim on May 31st. In normal times, this system makes perfect sense - but these aren't normal times.
"Vacation homeowners need to get a lot more flexible right now," asserts Karpinski. "Strict rules about non-refundable deposits and long cancellation times just won't work when vacationers are nervous about the oil spill. You'll scare them away. But strike a balance that's fair to you, too-you don't want to allow guests to cancel with no consequences just because they feel like it."
Get clear on your oil contingency plan. Obviously (as the survey clearly shows), many travelers will be looking for discounts. But tread lightly, cautions Karpinski. What you don't want to do is devalue your property. Start slashing prices to the bone and you'll have a hard time coming back from that, even if the oil never arrives on the beach. In other words, no matter what happens, don't give away the farm - after all, there are plenty of other things to do that don't involve the beach.
For her own properties Karpinski offers a "clean beach guarantee." It works like this:
If beaches should close and a guest decides not to come after all, she gets a full refund (minus a $50 fee to cover administrative costs).
If the beach is closed after the guest arrives, she gets a full refund for any unused nights.
If there's oil on the beach and a guest decides to come anyway - or if it happens while she's there and she decides to stay - she gets a percentage refund on her rental fee for the days the beach is closed.
"I've had homeowners approach me wringing their hands, thinking they have to let people stay for free if the oil arrives," notes Karpinski. "That isn't realistic: no one expects that of you and you shouldn't expect it of yourself. Get crystal clear on what your policies are so you can communicate them - firmly and confidently - to your guests."
Be prepared for last-minute bookings. Remember, the BSW survey found that almost half of respondents planning to come to the Gulf Coast this summer haven't yet booked. And when you factor in vacationers' increasing tendency to book later (oil or no oil), you can probably expect some last-minute calls. Be ready for them. List your cell phone number on your home page; you might even forward your home phone to your cell phone when you're out of the house. Answer inquiries right away. Be accessible.
"The behavior of last-minute bookers is significantly different from that of people who book three months in advance," says Karpinski. "They simply don't have time to sit around waiting for you to call them back. If you don't answer, they'll move on.
"Also, have a system in place that allows you to quickly process payments - a credit card merchant account, perhaps," she adds. "You might even consider having a housekeeper or property manager show up on-site to collect cash upon the guests' arrival. The point is, you'll probably have to step outside your normal policies to get your place booked now. At least for the foreseeable future, you're operating under a new normal."
Don't do a knee-jerk claim filing. Due diligence is in order. If things don't go well for Gulf Coast vacation property owners this summer, many will be tempted to file claims against their homeowners insurance. Or they may seek to have BP cover their losses directly.
       Whatever you do, be careful, urges Karpinski. Make sure you fully understand the process and know what you're getting into - under no circumstances should you sign any document without first consulting your attorney.
       "You don't want to get into a situation where you give up your right to future claims," she says. "Yes, keep careful records of your losses - including all dates and times and other details - in case you need them in the future. But don't make a move without seeking legal counsel."
       Understand this, says Karpinski: much of your stress is coming from the sense that you have no control over a bad situation. And while it's true that you can't affect what will happen with the oil spill, there is plenty that you can do to create a "best odds" situation for yourself. Doing those things will bring a surprising amount of peace.
       "Control what you can control, do what you can to attract and keep good customers, and take the rest day-by-day," Karpinski concludes. "That's the approach I'm trying to take as well. Ultimately, I believe we'll sleep much better knowing we did our best."

Oil Spill Tips & Scripts:
What Vacation Homeowners Should
Say - and NOT Say -
When Nervous Guests Ask Questions

       Gulf Coast vacation property owners are in an odd situation right now. On one hand, as they cross their fingers in hopes that vacationers will want to book their place, they're anxiously waiting for the phone to ring. On the other hand, they're dreading that ring - after all, it might bring a fresh onslaught of questions about the oil spill.
       "A big part of that dread springs from not knowing what you're going to say to your guests," explains Christine Karpinski, director of Owner Community for HomeAway, Inc., and a Gulf Coast vacation property owner herself. "Once you have some key words in place, you'll be able to speak confidently and reassuringly - and keep any nervous guests calm."
       Here are a few tips and scripts you can use when people call:
       DON'T speculate. DO focus on present conditions.
       You don't know what's going to happen with the oil spill. No one does. Obviously, you don't want to scare potential renters away with dire predictions, but neither do you want to promise the beaches will remain unscathed.
       In general, focus on current conditions and stay positive where you can.
       "Right now the beaches are open. They're clean and white, and the water is sparkling. That picture on my website was posted only two days ago. You can see that as of now this is a beautiful place."
       "This morning I spoke with the guests who are currently staying at my home and they said the beach has never been more beautiful."
       "The local community is prepared to deal with any problem that might arise. But right now I'm pleased to report that the beaches are open to the public and as pure and clean as they've ever been."
       DO "manage up" other aspects of the area.
       "Our beaches are beautiful, but this is also a great all-around vacation spot. We have wonderful restaurants, plenty of good shopping, and all sorts of fun attractions. There's nowhere else I'd rather be."
       "I can't wait to hear what you think about the new airport! It's really nice and convenient and quite reasonably priced. It's served by Southwest Airlines, and you know what a great reputation they have."
       "You will love the pool at our complex. It's so big it never seems crowded, and kids really like the built-in waterslide. Mine can play there for hours and hours."
       Do explain the brown water phenomenon.
       "When you're here you might notice some discoloration in or near the water. This is Not oil. Sometimes when it rains a lot, the rain mixes with the tide and creates a muddy-looking film on the shore. Other times our coastal dune lakes overflow and you can see their brownish water running into the emerald Gulf water. This is natural - and, again, it's not oil. I just want you to be prepared and not jump to the wrong conclusion."
       Do direct guests to valid information sources - especially when they ask about future conditions.
       "I can certainly understand your concerns. There's a blog you can visit that's updated daily to show the condition of our beaches. Just go to www.BSWUpdate.com to see how the beaches look on any given day."
       Do spell out your discount and cancellation policy - and DON'T give away the farm.
       Remember that if the oil does wash up on the beach, you're still offering a valuable service by renting your vacation home. Clearly lay out your discount and cancellation policy in a confident (non-apologetic) voice and make sure the guest understands it - you might ask her to repeat it back to you.
       Here's an example:
       "If the beach should close and you should decide not to come after all, I will keep $50 to cover my administrative costs - and then I'll give you a full refund."
       "If the beach should close after you arrive at my home and you decide to leave, I will give you a full refund for any unused nights. Again, that's after I deduct the $50 administrative fee."
       "If there's oil on the beach and you decide to come anyway - or if it happens while you're there and you decide to stay - I will refund a percentage of the rental fee for the days that the beach is closed."
       "I think this policy is fair to both of us. Do you agree?"

Get the "BP" Ball Rolling: How Gulf Coast
Vacation Property Owners Can Start a Claims Dialogue

If you own a vacation home along the Gulf Coast, you're doubtless worried about lost rental income due to the oil spill. And one of the avenues you're at least considering is filing a claim directly with BP or seeking redress through some other avenue. If you don't know where to begin, Christine Karpinski - director of Owner Community for HomeAway, Inc., and herself a Gulf Coast vacation property owner - has a few insights:

Go directly to the source. (Even if you don't end up filing a claim with BP, this may be a good starting point.) BP has established a claim system that allows people to be entered into a process to recover lost income or recoup damage-related expenses. You can file the claim for actual loss of rental revenue as well as projected losses.
The toll-free number is 800-440-0858. You'll find it and other I called BP's toll-free number, and to my surprise, a live person answered the phone right away," notes Karpinski. "They issued me my claim numbers and told me an adjuster would be in touch within three to four business days - they even gave me a number and asked me to call it if the adjuster didn't contact me within that time frame. I can't tell you how much this alleviated my anxiety.
"These are just my initial impressions, and, obviously, I can't guarantee that everyone will have a positive experience," she stresses. "But from what I've heard, the company is being extremely responsive - and they seem to have systems in place to deal with those of us impacted by this disaster."
Beware of "cash for claims" scammers. BP reports that there are (supposed) claims adjusters contacting people and telling them they'll file on their behalf - for a fee. Don't fall for it. BP's adjusters do not require you to pay. So if someone calls you and wants money, contact your local law enforcement office. It's most likely a scammer.
Before you sign anything, seek legal counsel. "I'm not a lawyer and most vacation homeowners probably aren't either," says Karpinski. "And I'm not saying this would happen, but you don't want to get into a "one-time claim" situation where you give up your right to future compensation. Just make sure your attorney gives you the go-ahead before you reach a legal agreement with BP or any other company or person.
"Remember, the long-term effects of this oil spill are still unknown," she adds. "While we're all hoping it won't play out like this, it's possible that your rental revenues and property values could be negatively impacted for many years to come. Don't just think about today - think about tomorrow too."
Consider other (non-BP) legal options. "Remember that BP's claim system isn't the only game in town," asserts Karpinski. There are other independent attorneys and some HOAs forming class action lawsuits as well. Make sure you have a good grasp on all the options and the implications of each before you make a decision.
"I'm not advising that you work directly with BP, nor am I advising against doing so," says Karpinski. "I'm simply encouraging homeowners to weigh all their options and make an informed decision."
Keep meticulous records. One thing's for sure: if and when you do successfully file a claim, you're going to have to be able to prove any real or projected losses. Keep careful records on cancellations and deposit refunds and be sure you have paperwork from previous years organized and at your fingertips.

        Editor's Note: Christine Karpinski is the author of How to Rent Vacation Properties by Owner, 2nd Edition: The Complete Guide to Buy, Manage, Furnish, Rent, Maintain and Advertise Your Vacation Rental Investment (Kinney Pollack Press, 2007, ISBN: 0-9748249-9-2, $26.00) and Profit from Your Vacation Home Dream: The Complete Guide to a Savvy Financial and Emotional Investment (Kaplan, 2005, ISBN: 1-4195069-1-9, $19.95).
       Her books, combined with her seminars, media appearances, and Web site (www.OwnerCommunity.com), help thousands of people purchase and manage their vacation homes. Today she serves as director of Owner Community for HomeAway, Inc. (www.HomeAway.com).
       HomeAway, Inc., based in Austin, Texas, is the worldwide leader in online vacation rentals, representing more than 480,000 paid vacation rental home listings throughout 120 countries. HomeAway offers an extensive selection of vacation homes that provide travelers with memorable experiences and benefits, including more room to relax and added privacy, for less than the cost of traditional hotel accommodations. The company also makes it easy for vacation rental owners and property managers to advertise their properties and manage bookings online. The HomeAway portfolio includes the leading vacation rental websites HomeAway.com, VRBO.com, and VacationRentals.com in the United States; HomeAway.co.uk and OwnersDirect.co.uk in the United Kingdom; HomeAway.de in Germany; Abritel.fr and Homelidays.com in France; HomeAway.es in Spain; and AlugueTemporada.com.br in Brazil.
       HomeAway also operates BedandBreakfast.com, the most comprehensive global site for finding bed-and-breakfast properties, providing travelers with another source for unique lodging alternatives to chain hotels. For more information about HomeAway, please visit www.HomeAway.com.