The Vacation Rental Data God Is Back With An Update (With Jamie Lane)

[Music] I charge you guys to continue this thing. Honestly, I think it's a gift to the industry. I mean, just if we could all do one thing for a week, we could really change the way some of us are running our company's set. Alright, Adam, good morning. What is going on? What's happening? Morning, sir. Well, we just had 10-15 minutes of good chatter before we started. So I anticipate that this one will be good. We're already hitting on a topic that I had in mind, which is obviously going to be data when we've got Jamie Lane here. So I'll give a short-sports analogy and we'll jump in. So I mentioned a few episodes ago that my son, my 15-year-old, is trying out for a new club team. Same club, but an upper-level team. And at the time, I won't say this made. I was just a little bit sort of off-put in the idea that I was recognizing that in clubs, like any other large organization, there's probably a lot of politics. So we were coming off of a couple of try-outs thinking, you know, what are the odds that we make it? We don't know how many spots are even available on these teams. Is there two? Is there ten? Like, who knows? And then you go to the try-outs and there's got to be 50 plus guys competing for those same number of spots. Well, good news is that he made the team. And as I look back on it, I think that they actually were a little bit more data prone than what I had hoped for. So when I look back on it, him and three other guys from his team all leveled up, which makes sense. That's sort of the better group of his team, the going up to the next team. And what I think happened is that the club took the time to actually talk to the coaches and understand, okay, we saw these guys at try-outs, we've got some information from the last year. What does the current club coach have to say about them? And I think they looked at a variety of data points to come together and make that decision rather than we saw 50 guys at a try-out and we made this decision. So I'm really pleased to see that. But what that shows me and sort of the underlying current that we'll get into today is I think about data as a signal, right? There's a lot of these different data points. But in order for us to actually use that data and get this signal, we've got to take the time to look at it and understand what the data is and what it's direction that is pointing to. Not just, hey, this is the direction I want it to point to, so I'm going to find the data points that show me that path. No, I think we've got to take the time to actually look at the data. So obviously we've got one of the best data per people in the industry here. So looking forward to understanding what Jamie's perspective is on the quarter that's obviously in the past. But more importantly, what we've got ahead for the rest of the year. Jamie, welcome back. I decided to have you back. Maybe some of the listeners don't know you. I can't imagine that's the case. What's the elevator pitch on Jamie Lane and Air Day and I maybe before we get into that fun key one recap. Yeah, so I'm an economist been in the travel industry for 16 years now. So spent 10 years analyzing the hotel industry at CBRE, which is world's largest commercial real estate company. While it was at CBRE, we came the first subscriber to our DNA data back in 2015. Essentially needed the data. I was forecasting hotel industry performance. There is a small thing called Airbnb that was getting some traction, especially in urban markets that we need to keep an eye on. And then joined Air DNA in 2020 and been doing and leading research now data science at Air DNA. And it's my job to keep an eye on the data, understand what's happening in the trends and try to explain them to industry participants and were global company. I think we're now up to about 140 people spread out around the world and yeah, data on every city around the world. Yeah, it's incredible. I mean, Air DNA is such a valuable tool and I find myself reaching for it pretty much every day. So yeah, if you haven't checked it out, you probably should at this point. I can't imagine many people listening are familiar with it. But yeah, Jamie, we can kind of fold it right into it then. Q1 data, what's kind of the gives the highs and lows, would you kind of see? I feel like I hear my and a total chatter from individual clients, but then I have to go back to Air DNA data to see how things are actually going. What would give us the low down? What's going on? Yeah, I'll say it was a weaker Q1 than I was expecting in terms of overall demand growth, occupancy growth, anything like that. We're we've now seen 10 consecutive months of falling occupancy and we're end of 2024 going to 2025 things of state of eyes and out we're sort of expecting growth. Q1, I would say what surprise I think everyone was the weakness in the mountain markets and it was well reported the lack of snow out west and that absolutely impacted performance. So we watch sort of both pacing and then in the month for the month bookings. So what comes in a lot of bookings happen last minute, a lot of bookings and stone markets happen. Like you get dumped on like people book they go. And we just didn't see that this year. So each consecutive month this winner just got worse and worse things sort of compounded on themselves. So Q1 occupancy and the mountain markets was down like 5% and 5% down like that is that is terrible. And just as a data point in the first quarter about 30% of industry revenue goes into those mountain markets. So it's not a time when beach markets not a time when a lot of urban markets are seeing a lot of demand. So that definitely weighed on industry performance. Urban has been in this sort of malaise for the past sort of nine months really since liberation day back in April. We've seen international inbound really turn negative after that. So starting the summer or this past summer through to today. We've seen no growth and urban demand. But now some positive sort of take out mountain take out urban. We're seeing growth. So first quarter absent all those other things we saw demand up to 1.5%. We saw occupancy relatively flat. We saw 80 our growth around 2%. So yeah, definitely some weakness out there, but overall I'm broader trends of small and mid-sized cities still growing at a decent rate. And we're still seeing and supply of anywhere from and 5% to 10% being added in these small and mid-sized cities around the country, which still continues to surprise me. All the while and growth in and core vacational markets is sitting around 1% to 2% and growth in large metro areas is flat at best. And then there's these sort of pocket pockets of growth still in areas that are still affordable to buy in. Still affordable to find labor. And that I think in many ways is surprising that people are still wanting to travel and explore and find these new destinations that isn't just going to myrtle beach every summer or it's finding new areas. And it's fun to see the areas that are growing. Yeah, I'm surprised by the growth as well because I feel like to you know you go online you read different sentiment reports about what's a terrible time to buy, you know the interest rates are going up and this kind of stuff. What do you have any theories as to why people are still you know putting new stuff on the market is a people that were second homes that they're converting into vacation rentals that were not. Hey, we need the money. So we're going to try to get something out of it or is it truly the investor going in there putting their numbers on putting their air to your report up on the screen and going, yeah, this looks like a good idea. Let me go ahead and spend all this money right now. What are your thoughts? Yeah, getting into what's going on the housing market and we could spend a whole podcast around just because it's and so dynamic right now overall home values are flat. But if you look at and some of the biggest vacation markets around the world are around the country like home values are falling pretty substantially like you look at most Florida markets were down. I know over the past year around 10% you look at and Joshua tree you look at Gatlinburg you look at some of these markets where I invocates your own markets make up a sizeable percent of the inventory and and we are seeing a correction on home values. And ultimately that really does help the numbers pencil to make new investments into those markets and we have seen supply and these markets start to come back and supply inventory for homes to buy. And at time where the past four years there's just been nothing the markets have been tight people that had homes were using them so we have seen them open up a bit and the demand just not be there as much as maybe people hope because interest rates are still so high home values are still relatively high compared to where they were. So if you're willing to be patient and find deals like there's absolutely great investments to be had in a lot of classic vacation or markets around the country but and you may have to wait and for a property beyond for and three months six months before people are willing to and maybe take the cut on on what they thought the home was worth. And so we have to have to have more reasonable number and all the while they've got so much equity built up in these homes like the home value of what they even if they bought it in 2018 it's doubled in price they they have room to make some moves to sell the property if they are motivated. And so we have to have a lot of money to be able to make a move to make a move to sell the property and the property that they have in the home value of the property. 2021, maybe that was a time period where they would have bought it at a quote-a-quote inflated price. And then they had two or three years of, oh my gosh, this cabinet's doing $100,000 a year revenue. I thought it was going to do 60,000 a year. And then they, it's, this is something our clients deal with. I don't know your perspective on this, Jamie. It's almost like mentally hard to accept that your property manager is only giving you 70K a year of revenue when they used to give you 100K because you want to blame them. You want to be like, well, Mr. Property Manager, you must be doing something wrong. Because two years ago, you're doing 100K. What happened? What would you say to those owners? I feel like every property manager listening would want to be like, how do we use the air DNA data to tell the truth about what's going on in some of these markets? Yeah, and that's where we tried to help those property managers tell the story of the market of, yeah, in 2021, there was in 10,000 fewer listings in our market. And even that was down 5K from, I mean, in 2019, as sort of we saw a correction supply demand came back, occupancy is pushed to record levels. And now the supplies really come back. And we've seen those, we've seen occupancy levels come down, we've seen price and power road. And overall market is now down and 20% in terms of average revenue. And yeah, you're down 15% like 20% like and that is the trend. And let's just show you in a long time series of data going back from an air DNA has been collecting data since 2015. And we can now show a full 10 year cycle of just how abnormal 2021 and 2022 was. And I think I told this story last time when I was on the show of like my first forecast I created what when I came to air DNA was in 2021 was like, guys, like, it's not going to be good. These occupancy numbers cannot go up. They are so abnormally high. And given what's happened on supply and what's how supplies expected to come back occupancy is going to come down. It's going to come down pretty significantly. And that's going to cause ADRs. And I sort of send it to my boss or CEO, I was like, here's the forecast. He's like, really? That's what you want your first forecast for the industry to be is that and Revpars going to go down 5% next year and 10% the year after. And it's what I think is going to happen. And yeah, it was a hard pill to swallow them. It was a hard pill to swallow when it was happening in the industry. And we were trying to explain and what was going on. And then it's even a harder conversation to have with homeowners because half those homeowners were and maybe dealing with the reversion back to pre COVID levels of revenue. It's like, all right, like the good times are over. And then the other half they bought during that cycle with the expectation that those high revenues were going to maintain. And now they're not. Maybe they're under water. And that's conversation I hear from a lot of property managers. And they get their owners complaining. It's like, I can't make it work as an investment at these revenue levels. You were getting me this. I underroaded at this now. And how can we make it profitable? And those are entirely different conversations. And I think good conversations be had because there are ways that you can maybe invest a bit more into the property, make it more attractive to certain guest segments, maybe add that hot tub, add the design, and show how you're underperforming and relative comps. And maybe there is a way to make it profitable, but it might take a little bit more investment. Or this is this is what it's worth. This is what you're going to earn. And if you can't make it work, like that's a whole another conversation. Yeah. Yeah. I want to hear a reaction to all that Adam. I guess one, one quick and little story. Jamie, I was talking to this client actually recently in Blue Ridge, Georgia, which I think he has a knowledge of as they have a property up there as well. And a property that I stated with them pre COVID, I paid 135 a night. And they like knocked off a few fees for me. There's a very great client that I work with up there. And I was like, totally, I went back in my email looked it up. And that was accurate. 133 or 134. And I just when I paid this upcoming weekend or the weekend after something like that, it was available 333 a night on the spot. So it's like, that is crazy to think like a 20 late 2018 beginning 2019 steak, right? That it was low season up until the spring now. There's been almost a tripling in price. And it's a great property. Don't get me wrong. But we're talking to one bedroom cabin. You don't Blue Ridge, Georgia. This is not a super high end premium, unbelievable, you know, type of type of property. And that's the kind of rate inflation that's gone on. And you know, inflation plus the rates plus all these changes, you know, COVID boom, all that kind of stuff in that market, which may be a little more undiscovered in 2018, as it were, Adam, a lot to react there. I don't know if I have a really well formed question here, but just kind of your reaction, Jamie's kind of industry trends, what you're seeing, what you're going, what we're thinking about it, how does the property manager react? I guess to all the all the stuff and all the trends that Jamie's showing right now. Well, I do think that this is a place to Jamie's point to really lean on data, because I think Tata does tell the story. And the fact that Air DNA now has 10 years, I think is really important because I think showing that on a graph, if you had a line graph and you showed what that looked like over the last 10 years, I think that the homeowners would get it pretty quickly. Being to it, if you understand, like, oh, shoot, obviously COVID was way out of the norm. And it would show it very quickly in the data to do that. So I do think data from a communication to homeowners, data is really that important piece. Now, there's a much bigger discussion around transparency and having difficult conversations and good communication with homeowners, like that's an entirely different discussion. But I think the way to tell the story is going to be through data. Now, I'll also concur with Jamie that. And totally, I'm seeing exactly what Jamie described here on the Outer Banks. Very well established market. We clearly grew quite a bit during COVID, real estate prices were very high. And now I'm seeing home, sit on the market, I'm seeing homes not be looked at. I'm seeing homeowners holding on to high prices for much longer than they want to, going back to that point either they bought too high or they just haven't come around to the fact that prices are going to decline. I think the correction is here. It's going to take time for that to play out and who knows how much of a correction will it be. There's a lot of other variables that will play into that. But I think that it changes the dynamics of 2026 already. Like it's already here. Homeowners are now in a different place. We've got to help them understand what that new place looks like. And as a result, the property managers are in this new place as well. I guess the one question that I've got Jamie and maybe you could, this is, I guess, some clarification from me. So if it's for me, then maybe through some listeners as well. But when you talk about that first forecast you did, I've got two questions for you. One, do we think that it has already played out? Right? Or is there more of that downfall to come? Because clearly you saw it very quickly when you looked at the data. And then two, as you, as you maybe answer that one, how does Air DNA think about the difference between a professional manager and data from a PMS versus what you guys and clear, clarify it if I'm incorrect. But what I'm guessing is you're getting the majority of your data from Airbnb and the OTAs that you can get from online. Is there a value in looking at the difference between maybe what the PMS is delivering? Or do we find that so many managers are now on the OTAs that it really wouldn't make much of a difference to look at the difference in that data? Yeah. So I'll start with the sort of forecast and sort of where we're at. So occupancy for me is a very forecastable variable. Because it sort of centers around an overall trend and average over time. And when it sort of gets outside of norm and during COVID, it was clearly outside of norm. That's when we expect supply to react. So when occupancy gets higher, people start earning XX profits. That's when you see new investment come in. And people invest up into a point when now occupancy has come so far back down that supply pulls back. And then and you sort of get to an equilibrium and and then there might be a shock and a demand shock is one that we saw during COVID where people stopped traveling. And all of a sudden people stopped adding new supply and we saw occupancy sort of ratchet up as demand came back. So where we're at right now is we are very much in that equilibrium period. We are overall at pre-COVID levels of occupancy. There's still a lot of vacation rental markets. Still most mountain and beach markets are above their pre-COVID levels of occupancy. Most urban markets are still well below. So when we talk about like Sander going out of business, we talk about and some of the and real headwinds that urban operators still have, they are still not anywhere close to pre-COVID occupancy levels. And what we saw this past year in terms of international demand pulling back. Like where do international travelers go to? It's urban areas. Like they're not how many German tourists do you see traveling to out of banks? I bet it's few and far between. So there is still some equilibrium to set still play out. I think if interest rates were significantly lower right now, we'd still see a lot of supply growth and a lot of the mountain and coastal markets. But we're still and above six. And if we were recording this month and a half ago, I'd be talking about how interest rates have just dropped below six. And we expect them to continue lower. Now I'm with the war in Iran. We're now back over six and a half percent for a 30 year fixed rate mortgage. And that's it's put a new cool on the overall housing market. And then your other question was around air DNA data and sort of what we're tracking and what I think it sort of represents. So we do track every listing on the OTAs. What are they getting booked roughly with the rate that they're getting booked out and how that's been trending over time? Because of how we track the data. data. It doesn't matter if that's an OTA booking or direct booking, we're capturing within our data set. So the only piece we would be missing are those property managers that are still not on the OTAs. And I know they exist. I bet there's quite a few in the Outer Banks market. My family goes to Litchfield Beach every summer in South Carolina. And we rent from a property manager that still has a rate card that they give us every time we show up. We're allowed to book for the next year after we check out. And it's not bookable online. So I mean, it still happens, but I think we've got visibility around probably 95% of the overall inventory in the US. And that the trends that that sort of gives us is very representative of the overall industry. Do you have to do it by facts, Jamie? Is that how you send in that confirmation for the Litchfield Beach property or how do you carry your pick? They accept facts, but we actually generally go in person as we're driving out and talk to them, which is another weird way to do a booking. Yeah. No, no, I think that Adam though, you bring up a good point with respect to like, you know, understanding the data, every piece of data has limitations. Right? And we were talking earlier about other competitors or other people out there that offered this source data and they have their limitations too. They don't have everybody signed up for their services, right? So they're not going to have maybe the wide as simple size of, let's say smaller managers, if they can't get a smaller manager to agree to share data, right? Like that's a hard to challenge them to. So every single, you know, platform has its own kind of challenges or quirks. And you know, Jamie, I feel like you guys are pretty up front about how your data works and how things go. But it's good to for those people to understand how, how things are. What's your read on that, Adam, as far as like the property manager using that data and making good decisions about it going forward, is it that maybe in some markets are going to have, you know, a little bit less data than other markets. What's kind of, how would you react to that? You know, what Jamie is saying there? No, that that clarifies the formula. That was what I was trying to understand is if there's enough data that maybe there's, then the question becomes, do we need another source of data in order to like balance that out? But I think you're right that you're getting probably 95% of it through the OTAs and it makes sense. The only spot that I could see that potentially could be a gap and maybe you guys have figured this out is if there's some sort of like owner block or we block a calendar that's not a reservation. Yeah. And that we, we, I said, I managed the data science team now. So we've done a ton of work to try to get to and what is an owner block versus what is the reservation. I wouldn't say we're 100% there, even maybe 80% there, but it is a challenge, but it's one that and we do have a ton of source data from the PMS is that and comes into the RDNA data set. We use it to train the machine learning model. So it's, I mean, this is, this is AI at work, right? And where it's, I'm seeing what is the difference between an owner block? What is the difference between a booking? What are the lead time differences? What are the length of states? Like, what is it? Typical owner block in this market? Look like, like, and I mean, it's, it's learning and it's getting better every day. So this is one of the fun things with our data set as it actually continually gets better and it doesn't just get better going forward. We actually have it go back and re estimate prior year demand, prior year's demand. So the data set and you look at it from month to month year to year and you might notice I'm, my new changes over time, but over time it is getting better. And that's one of those things that I'm, we're putting a lot of effort and money into is how do we have the industry best data set going forward? Because data has to be an input in all these decisions. And if you don't have data, we're making guesses and an absent of data like I, and there's a lot of bad decisions that gets made. I guess I take on that too. People are worried about a few owner blocks here and there. A few maintenance holds here and there. First of all, it seems like you guys have a pretty solid way to think about it. But it's like, don't throw the baby out with the bath water, right? It would be sort of my reaction to that as someone who likes the data. But also on the marketing side, I feel like we always have to have both creativity, we have to hold creativity and new ideas and how do we kind of save this in a unique way with the data of like, okay, we go and ran this campaign, how did it work, how to perform, how many clicks happened on this ad, all that kind of stuff. So I feel like, yes, you know, use it, you know, judge it against your own data. See if there's some discrepancy. Maybe that discrepancy is somewhat consistent. All every time you can measure over time. But, you know, this idea that there's some utopia rainbow on the other side where you can get perfect data in a major Jamie's life would be a lot easier if that was the case, but it is not the case. So you got to work about you. I think that's the case of like all data we work with, like, I know working with our marketing team on like, I'm GA4 attribution data on our own ads. It's like, don't get me started on that. It's probably, it's getting worse. That's the funny thing. Not, we'll do a one minute rant here on ad tracking platforms and just something that I wouldn't have predicted. If you would ask me when you joined ARD and I let's say back in 2020 or something like that, Jamie, oh, what do you think the future of the marketing space is going to be, you know, with the clients that we work with? And the data we have now is worse than the data we had five or six years ago because there's been this crackdown and lockdown and stuff around privacy in the 2016 election. Oh, we can't do Facebook ads, very small groups of people, things like this. And there's actually been a big regression in the amount of like fine tuning, you know, watching a user go through website, how they work, how they click that kind of stuff is actually gotten a lot worse. And things like GA4 just accelerated that made it harder. Metapixel, iOS, blocking, how the metapixel actually works, you know, by default. So people click on this ad, you know, do they actually go through and complete the action you want them to? It's a lot mudnier now than it used to be, you know, a few years ago, which is funny. I would have thought, oh, it's going to get so much more accurate five years later. You know, we're going to actually know exactly how this person looked at the website before they signed up for AirDNA, before they booked a vacation, and we're going to have so much more information. And it's, again, ironically, it's been the opposite. So future looking, trying to do our best, Jamie, to figure out, you know, kind of where things are going to go from here. Do you have some initial Q2 predictions? How do you think, you know, kind of the spring will treat us? And as we head into early summer, memorial days kind of locked in there, what are kind of your thoughts of where we're headed from here? Yeah. And across the board, Q2 and Q3 is looking significantly better than Q1. And as we look at and beach markets and even now markets for spring and summer, things are up. You look at US as a whole and things look incredible for this summer. A lot of that is being driven by the roll cup. And if you haven't heard the roll cup is coming this summer, I've probably done 30, 40 media interviews over the past like a couple of months. I just hope they're recovering well from their comma, whoever just heard that for the first time. I hope that person's been well. Yeah. And yeah, there's a ton of excitement there, bookings in most of these major cities. And it is major urban areas like it's Atlanta, Dallas, Houston, Boston, San Francisco, Seattle, Kansas City, Miami, that's in the core hosting markets. But even if you look at, I was just pulled the data for Buffalo. And you sort of line up the increase in demand in Buffalo. And then when the games are happening in New York and Boston, it's like, clearly there is a lot of people that are traveling to the US for the roll cup in traveling to what are those key destinations I want to travel to if I'm going to New York and making a full trip out of it is I mean, I don't know how many people that are going to come to the US and maybe come to Atlanta for the roll cup and I live in Atlanta. I love Atlanta, but I wouldn't want to stay in Atlanta for a week. I'd want to travel elsewhere and see the sites. And so if you're going to Houston, maybe you're going to add on Austin, who in Atlanta, you're going to add in Nashville. They're going to be a lot of spillover demand from the roll cup that we think is going to be a significant driver. And then, and you think about those Atlanta residents, like maybe they care less about soccer, like got excited about running out their home during the roll cup. Like they're then going to go down to maybe 30 A or going to go up out to Mertle Beach or go out to the Outer Banks because they want to avoid what is going to be the traffic and all the visitors coming in. So ultimately, I do think this is going to be a major demand event that is going to impact all markets in some way and maybe not in the ways that you would have expected. So I'm feeling I'm very bullish about this summer in particular. I'm very worried about I instill the current administration and their ability to support that inbound tourism. And whether it's unlocking visas, whether it's in the threat of additional visa fees, I'm checking your phone for social media. And like are you saying things against the administration and whether or not you're going to be detained at the border. Like there's a lot of, I think worries that international travelers have in coming to the US. And that's something that our industry that's something the broader travel industry in the US has to be getting on board of saying the US is open pushing the administration, both local and national figures that we've got to be accepting to international guests. And that 10% of the US economy is driven by tourism. Like we have got to be better at making our country open. And that ultimately, like what happens to our industry is a major driver of economic growth. And you look at overall inbound tourism to the US, it's down 10% from 2019. You look at outbound tourism, so American traveling overseas is up 40% from 2019. So we an overall global travel is up like 20 something percent. So we are not getting our fair share of international tourists into the US and that is billions of dollars that we are not capturing because of that. And so that's if there's one worry I had on travel going forward, that's on top of the list of, it's just impacting overall growth. Yeah, I mean, Adam, I guess that's a bit tough to hear, right? Because it's like things completely outside of our control, you know, but at the same token, there are some good pieces in there too with respect to, I didn't think about the idea to spill over that someone would come into one destination and then kind of bounce around a little bit. But I think, you know, Jamie, the trip that I did to Italy two years ago, I did that. We landed at a moment and then we went to other places with Italy. So I'm like, by behavior, kind of maps to that, you know, on my own side of things. But Adam, what's kind of your thoughts there? Are we going to see some, you know, Germans in the outer banks or whatever Jamie was looting to there? Is that a possibility? Well, we'll clean. But so I, what, maybe that's the first time I've heard it. I don't know, but 10% tourism being 10% of the US economy is huge. I mean, that's such a large number. Clearly, it's going to benefit everyone within the vacation rental space to really promote the idea of trying to attract international travel and try to really support it well. And clearly, the world cup is going to be probably the forefront of that opportunity followed in a couple years by the Olympics out in LA. But the awesome piece of the world cup is that it's all across the continent, right? So we're not only, is it in LA, but it's across, you know, the East Coast all the way into North and South America. So huge opportunity. But to that point, Jamie, with some trepidation from people coming in, you guys are already seeing the jump in occupancy. How does that mirror hotels? And then do we still have time? Like are these plans made or are we two months out and we were like, hey, it is what it is or is there still time to really promote this idea and make sure that the tourists feel comfortable coming? Yeah. So this is surprised me every event that I've analyzed. People are so lazy in making their bookings. The vast majority of bookings happen within a month or two of the event. So I say, like occupancies way up, like look at a market like Boston, it's like 40% occupancy it's normally at this time, like 20% occupancy for the summer months. So I mean, there's still a lot of bookings yet to be made and Boston, the summer is going to be a 95% occupancy and maybe push close to 100 because of the World Cup. So every unit's going to be sold during key game days. There's a lot of bookings yet to be made and I've listened to some interviews with some of the big hotel owners and they're like, and there's a lot of noise around what's going on around hotel bookings. And you think short term rental lead times are short, hotel lead times are astronomically short. They're like, an over half of our bookings are going to happen within 30 days. We know that. So the meter reports of like, and FIFA can't sling thousands of rooms, like, and those are all over blown. These are our blocks that FIFA has sort of got allocated and they sort of did the bookings they want. And then they released those room blocks back to the hotels to rent out. It's like 100 days out like they're going to rent out those rooms. It's going to be fine. But it does. I think leave a lot of risk of things could escalate in the Middle East. Things could escalate domestically and we could see another Minneapolis situation. We could see another. And what was happening with the cartels in Mexico and around Port of Olarta and Guadalajara. Like there are a lot of things that could happen that could derail what should be an incredible a demand event for both hotels and short term rentals. So, yeah, it's, it's not something that we're like, we're guaranteed that it's going to be good. There's still a lot that could happen to, to derail it. You mentioned a trend there, Jamie, one that all of my clients seem to complain about if you will, this trend of people booking closer and closer to check in. I guess I think back to my time entering the industry and talking to someone like Mike Harrington. I remember I spoke to him. This would have been back in like 2015 when I was still at the previous agency. And we'd be around this time. Actually, before this, we'd be in March and he'd be like, well, that's how the summer's going to go. Like you get all those bookings for the summer, you know, up in Topsell, North Carolina, you know, in January and February and even to your point describing your stay in Lichfield, people that have booked the prior year for the next year, that sort of thing. Now it's such a different world. Just your thoughts on this. The airline industry seems to be way better at this than we are. Like the airline industry punishes you for waiting, right? If you wait too long, it's like, I'm in a way too long. I'm going to get killed on this ticket price. The short, parental industry, we trained our guests. I feel like to some degree, broadly speaking, to say if you wait, you get a better deal. Because we just as the check in gets closer, we lower rates or rates or rates. So in a market where there's a lot of supply and you're not that picky about where you're staying, maybe you'll take any two bedroom condo in South Carolina. You're not that picky about where you want to stay. Are we not training the guests on like, you know, just wait and you're going to get a better deal? How do we get some power back, I guess, you know, like the airlines have done in pricing. This is just more of a broader industry issue. I don't know if you could solve it right now, but I'm curious your thoughts. Yeah, I'll give you my, my economics 101 over it on it is that the airline industry is an oligopoly. Like, there's what six main players like that control 90% of overall flights. Like they can have sort of pretty significant pricing power. They can control supplies. So if there's too much supply between a route, no one has pricing power, they can all decide like, hey, let's all cut nine one plane once a day and then all the sudden our capacities at 90% instead of 50% and we can all raise prices by 30% and earn a whole lot more profit by running less supplies. So the short term rental industry hotel industry is so fragmented that I mean, for us to have any sort of collusion around supply is impossible. Absolutely impossible. The only collusion we get around supplies when cities regulate short term rentals and all right, there's a cap. And then that cap and limits growth and then all of a sudden everyone gets a whole bunch of pricing power because occupancy skyrocket because now there's way too much demand for the number of available listings. We're actually seeing that play out in a lot of European markets right now where the government artificially limits supply and that's actually, and as long as your businesses and built-on growth, maybe you're an operator, you've got your hundred listings that you're managing or like, half the things are actually kind of nice. This is where not. You see CQS Florida, Jamie, if you want a good example of that great market for that, just woo, pricing power. They got. Yeah, because you're not dealing with the supply influx that really does happen with our industry. If there's people making money, there's absolutely going to be more supply and unfortunately, Erdien A is a, I think part of the reason we give so much visibility in what earnings are. Like if there's a lot of properties making good money, relative to the home values, like there are going to be investors that come in and add supply. Like there's not going to be a lot of hidden markets anywhere anymore where there's just like so much money to be made that supply doesn't come in. So yeah, it's. Yeah, is there a pricing strategy element to that? I guess what I'm getting at Jamie, like that's a great explanation. Thank you. Yeah, I guess what I'm getting at is like, could we better forecast demand to where we're not doing this like cascading down rate thing? Or is it that like, Hey, we should be pricing things high, far in advance for that 20% of people that are already booked in Boston. They paid a premium rate. People to book closer to check in are paying a low rate and that's how things should go. What's like your economic take on that? Yeah, my, I mean, we've been doing a lot of sort of digging into pricing theory and models and things like that. And I do think there is an ideal booking window for most listings and it's when guests are going and booking into your market. Like you can have your price and the point of having your prices really high really far out is like, not a whole lot of people are booking that far out and the ones that are going to book your home really want your home and the pricing power you have for that booking for that guest that's willing to pay it. Like we want to go back to the same house every year, we're going to be able to, we're willing to pay a whole lot more than someone that's never stayed in that home because of the convenience, the location and where you set that home, we just like it. So there is a lot of theory that goes into and what, how do you price around that booking window and to make sure that you're going to convert a guest during that time when you can sort of maximize the revenue given the probability of booking. So that, but then once you get past that booking window, let's say you're a medium booking window in the outer banks of 70 days and half the bookings after seven, I'm up till 70 days of the day, I've already been made. Then after that, like you're probably a bill probability of booking is collapsing every day up into that stay. If you haven't sold it and yeah, you've got to start pulling right down and unlike their line industry, we've got owners of each of these individual homes where they treat whether they're sold or not as, and whether you did your job at or not, where a airline, they did their job if they get to 90% capacity and are able to really profit maximize those last 10, like you cannot or most operators cannot do that with the last 10, 20% of their supply. Like they're incentivized to sell it at a rate that's going to get it sold, not sell it at the rate that profit maximizes and maybe like 10% get left unsolved, like I got to get to 100%. So it's a totally different incentive structure. I think it is the right one. Like, and you can't, and a lot of ways you can't fight it. Like you got to understand it and you got to realize like, okay, the property managers are incentivized to sell it. And as a guest, if you're willing to wait till last minute, you may not get your best property. You may not get the property on the beach. You may not get, and the ideal number of bedrooms are the right layout. So if you're willing to forego that selection, then yeah, wait. But if you want, and the best option, the best location, the best homes, like you're gonna have to book for an advance. And that's something that, and in marketing the properties and making sure like, and the right properties are marked in the right way, and that you're pricing each one individually. I think it does, I'll go into the whole structure of running one of these businesses. - Yeah, yeah. Adam, this idea of like reacting to, knowing again, the data you need to know here is some of the data that Jamie's referencing there around lead time stuff like that. I feel like some property managers, and I don't mean this in a bad way, have outsourced some of their thinking to these pricing tools. And maybe they don't have a handle on those numbers like they should, you know, they sort of look at this dashboard and insert pricing tool of choice here, which are great by the way. It's not that those aren't valuable tools. But I think understanding versus looking at a number on a dashboard and you know, insert again, pricing lab, price lab type tool here, isn't the same thing, right? Like that's maybe where the gap is occurring is like they're going back in their memory and thinking this property used to book, you know, much more in advance back in this year, I need to react to how it's, you know, behaving right now. Do you think that Adam is kind of part of the gap and part of the struggle that I feel at least when I'm talking to clients and their frustration on short booking times? What are your thoughts on them? - I think 100%. But I guess I pull back and say that even just in this conversation, the amount of variables that come into play in the tourism travel industry in general, but then specifically in the vacation space is really, really challenging for anyone to wrap their heads around and try to understand where we're going, how do we make these changes, how do we make the right predictions? Extremely complicated. But I agree with you, Connor, and I think that yes, we don't have a feel on the data or as close of a feel, we sort of outsource this and I'm sure AI playing into this is just going to outsource it even further. But I think that these revenue management tools came in and everyone, they became a standard relatively quickly and everyone got onto him and said, "Hey, we need a revenue management tool." Okay, great. But that's not really getting you to the point where you want where you're actually maximizing revenue. And that's why I think we're seeing this strategy layer come in for revenue managers that's sitting on top of what these revenue management tools are doing. And it's probably the right layer because we need some really smart people who are looking at the data, who have time to comprehend all of these variables and come back and suggest what is the right play for you, your individual market, your individual property, inventory, your individual business. And I think that all of those variables matter. But also what this sort of leads me down and I know we're coming to the end. So I know we can't get into maybe the weeds on this. But it sort of leans back into regulations. And Jamie, you mentioned the cap and there's a lot of communities that have done that. And in Europe, you gave a good example where it's actually beneficial for some of the vacation rental companies that have the ability to get within that list and they got the regulations. But is that almost an argument for regulations? Because there are so many variables out there that we're trying to manage and control. If we can get these regulations done on a market by market basis that are done really well where we're promoting the professionalism, where promoting safety, we're making sure that everything's run well, wouldn't that give us a much better handle on how we can start to think about the industry and the revenue and how we maximize these businesses? Because right now at the Wild West, it gets really, really difficult to manage. And we're gonna see, as a result of all these variables, we're gonna see losers. And that's just the way that this market is gonna play itself out over the next 12, 18, 24 months. And wouldn't that be offset if we had the right regulations with the right pieces in mind? - Yeah, and the point I would make there is that if our industry was driving forward on the right regulations, absolutely. The problem is is that right now, the people that have the seat of the table at the, and writing the regulation, just the hotel industry, it's the housing and NIMBIUS. It's people that really don't want to see our industry succeed. And that's when you get in the regulation in New York. Like there's not a single I/O to have something good out of the regulation in New York, essentially outlawed in our entire industry in one of the largest cities in the world. And then punitively of like, let's carve out a little bit that is okay, but then like you can't put a lock on the door. So like, (laughs) just make it where even that's not even feasible. So we have to make sure, and at 100% agree, like regulation in most communities, for short-term rentals is a good thing. Like I would not want to be operating in a business where there was just a wild west and anyone can be doing anything. But we've got to make sure it's the right regulation, it's the sustainable relegation that still promotes growth within our industry, still allows us to grow supply in a way that supports tourism where prices don't get too high, and you don't get a QS situation, where, but yeah, it's gotta be driven by our industry and not by others. - Yeah, it's so funny, Jamie, because I've talked to people, I call this like our bubble. And when we get out of our bubble, I talk to someone inside of our bubble and they're like saying something like that. Oh, I want to buy a home in Mertle Beach, or I want to buy a home in Blue Ridge, or some of these markets, Gatlinburg. And I'm like, why don't you look at Sonoma, and they're like, oh, it's impossible to get a permanent Sonoma. I'm like, I know. That is exactly why you should try to buy a home in Sonoma. Sure, as you're gonna pay through the nose for it, but there's like two other legal ones in the entire county, like perfect. Like that's exactly what you want. And I think as, you know, you can sort of switch people up in their head a little bit. Well, it's been fun, Jamie. We got to like a third of our outline, maybe half of our outline. I don't know, we didn't do it. But that's Jamie. It always says a lot to say, Jamie, I guess for all anyone that you think will be good chat for us here on the show before we come to a class for today. I think that's a good combination too. All the data, all the numbers, and then it's like kind of the numbers analysis, and then the text and the the sentiment analysis. That's what I was looking for there. I love that. Adam, hey, if we can get Snag's gift, we're moving up in the world. If we got Jamie Lane, and then we get a skipped person, I mean, we're really making it well. So we would bring him home. I'm the main drop Jamie when I ask him. Yeah, absolutely. Okay. You should all good. We're at time here. Thanks so much for listening. I need the data on the reviews to come through. So click five stars. That's the only review that will accept on iTunes. Spotify. So we get the most downloads. I appreciate that. And we'll catch you in the next episode. Have an awesome day. Thanks so much, Jamie. Put the links to the show notes. Check out what they're doing over there. Thanks so much.