The Vacation Rental Managers Association says it broke off talks with Pegasus Solutions over the development of a vacation rental switch to bring professionally managed vacation rental properties online.
The VRMA says its board informed members today that the two parties couldn’t reach an agreement with “reasonable terms that best serve the interests of vacation rental managers and their clients.”
VRMA says it will continue to develop the vacation rental switch by restarting a Request for Letter of Interest process to name a new technology provider for the switch.
The vacation rental association released what only can be interpreted as a put-down of Pegasus Solutions, arguing that VRMA needs a partner which “is in sync” with the association’s vision.
Alex Risser, VRMA president, stated:
“We are excited to move forward with the momentum of developing the Vacation Rental Switch, and are fully committed to meeting the needs of our industry,” said Alex Risser, President of VRMA. “From the outset, we have set a clear vision of the terms and conditions for an industry Switch which serves professionally managed vacation rentals and provides support for it to continue as the fastest growing segment of the travel sector. We remain committed to those terms to protect the long-term interests of our membership, and we will move as quickly as possible to partner with a provider who is in synch with that same vision. VRMA will be the first to make hundreds of thousands of branded professionally-managed vacation rentals available and bookable on-line.”
The VRMA says it establishing a July 29 deadline for interested parties to answer the Request for Letter of Interest, which can be downloaded here.
Unless the VRMA statement is a negotiating ploy to get Pegasus Solutions back to the bargaining table and ready to deal concessions, the development may be seen as a setback for the vacation rental industry, which has long struggled to get more professionally managed properties online.
Pegasus Solutions made its name in the hotel industry for creating a hotel switch to distribute hotel inventory to disparate channels.
In an interview with Tnooz in late May, Steve Lapekas, executive vice president of corporate business development at Pegasus, acknowledged that creating a switch for vacation rentals is more complex than for hotels because vacation rentals come in more shapes and sizes.
He said Pegasus Solutions doesn’t need to “reinvent the wheel” to create a vacation rental switch.
At the time, the thinking was that vacation rental switch development had neared completion, and it was left to the parties to come to terms.
Apparently negotiations have not gone smoothly.
Ironically, the announcement in the breakdown in talks comes on the day when rental giant HomeAway became a public company with a $2 billion valuation.
Some observers speculate that the VRMA-Pegasus Solutions breakdown gives HomeAway, which is acquiring and developing its own technology solutions as a priority, even more of an edge.
If the VRMA-Pegasus Solutions vacation rental switch was designed to be a hedge against HomeAway, then the hedges may have just been sheared.
Pegasus Solutions declined to comment on the development.
As one of the specs for the new Request for Letter of Interest, the VRMA says it is looking for a solution with no up-front costs for professionally managed vacation rental properties. The proposal states the VRMA seeks:
A low cost, transactional based model that encourages participation, with no upfront cost to VRMs and low upfront cost to software providers and distribution channels, which will enable higher utilization of the Switch and ultimately facilitate significantly greater amounts of commerce.
The VRMA says its roster includes 600 property management and associate members throughout the U.S., Canada, Mexico and the Caribbean. These members represent some 150,000 vacation rental properties, the association says.
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Logic prevails: did people really think Pegasus was going to code, maintain and operate a platform run on a not for profit basis? Really? Forget the bridge I have in Brooklyn; I hear that the Tooth Fairy has a dev-shop, and she’s lookin’ for work.
Ernest – it is clear you didn’t understand what is being put together with this switch.
It is in no way a not for profit situation for the provider.
Keep your bridge and tell the tooth fairy she might want to take a look at the request.
If she answers though she better be sure she is ready to abide by the request guidelines or it’s back to collecting bloody teeth for her.
With out going into too much detail about the switch, I think it’s interesting to hear what a lot of our clients have been asking for to manage their properties. As a vacation website provider for individuals and property managers, we’ve come to learn that an al a carte platform is the best way to go. Similar to Sales Force which offers an open platform where users can integrate from a wide selection of third party applications and plug ins. Property managers and individual owners generally are happy with their current reservation systems, they just want them to mesh well with their own personal website strategies. With this, we feel that the alternative to the switch will be an open vacation rental website platform, which allows for managers to select from a wide variety of third party applications. (ie: if you are happy using Homeaway Connect as you reservation management tool, but want to manage your own social marketing and website content. You can plug the Homeaway Connect application into the WebChalet open platform.) There’s a lot different reservation management options out there which is causing the desire for a central reservation system. But what if instead of one central system, users had a website that acted as a main hub for which they could select from a menu of third party software applications like Homeaway Connect, Intuit, Vacation-rental etc…
Erik, I like your idea of an open platform, but someone still has to build and pay for it, manage it on a daily basis and maintain it on an ongoing basis.
And probably even trickier than the money side is getting consensus from an industry with a fragmented supplier base with multiple business models alongside the hulking well-funded behemoth that is Homeaway. If only two entities (VRMA and Pegasus) couldn’t come to terms, what are the odds of the larger industry being able to create something?
I am fascinated by the evolution of this segment of the travel industry and the speed of change of that evolution. Who knows – perhaps within a couple of years things will have changed enough that such a platform could be built, but I’m not holding my breath (for now).
I think they need to clear this stalemate up, it is not a good thing for the timeshare industry and Homeaway will benefit and the consumer will lose out due to less competition.
I would have thought that a the development of the system could pay for itself by taking a small fee from users of the service either timeshare clients or developers.