- Lori Hawkins American-Statesman Staff
Mark and Christy Strüb had no idea how time-consuming it would be to oversee the downtown vacation rental condo they bought in February.
“People need an immediate response — both on the booking side and when they’re staying there,” said Mark Strüb, an Austin real estate broker. “If the air conditioning goes out at 11 p.m., you have to be there. It was becoming a full-time job, and I already have a full-time job.”
So when the Strübs heard about a new Austin-based online service that handles the process of renting out a vacation home – from marketing it on sites like HomeAway to sending a cleaning service when the guests leave – they signed up. It worked so well that they turned a home they owned in Hyde Park into a short-term rental as well.
“It changed the whole experience,” Mark Strüb said.
That’s the goal behind TurnKey Vacation Rentals, which was founded last year by two veterans of the online travel industry. John Banczak formerly held leadership roles at HomeAway; BnB.com and Hotwire.com; and T.J. Clark was previously CEO of Limos.com and corporate counsel at Hotwire. TurnKey’s vice president of technology, Doug Squires, was formerly director of engineering at HomeAway.
“The typical owner with a vacation rental has a day job, and they start renting the home and quickly realize it’s a lot of work,” Clark said. “John and I worked together at Hotwire, and we reconnected and came up with this idea to use mobile technology to help us handle every step of renting homes for the homeowner.”
TurnKey received a big endorsement last week with a $1.5 million investment from online travel heavy hitters including Orbitz CEO Barney Harford; Hotwire co-founder Karl Peterson; Hotwire and TripIt co-founder Gregg Brockway and BnB.com founder Eric Goldreyer.
The vacation rental industry has been growing by 10 percent annually in recent years and is expected to generate $110 billion in 2013 in the U.S. and Europe, according to trade groups. Austin-based HomeAway, the leader in the online vacation rental industry, has more than 700,000 listings worldwide.
“When I heard the idea, I realized this was a huge untapped market,” Harford said. “T.J. is recognizing that for your average homeowner, this is quite complex. He and his team have developed software that simplifies the whole experience, and at a price that is very compelling for the property owner.”
TurnKey competes with traditional property management firms, which typically charge 30 percent to 50 percent of the booking amount. TurnKey charges 10 percent of bookings. That means $20 for a $200 a night rental.
The lower rate is possible, Clark said, “because the technology is allowing us to be much, much more efficient. The more homes we get into our service, the more we’ll have scale advantages. The typical property manager has 20 to 30 homes, and that doesn’t lend itself to getting significant economies of scale.”
The service includes creating a listing and promoting the home on vacation rental sites, responding to guest inquiries and handling reservations. TurnKey oversees the visit, including check-ins, cleaning, maintenance and any issues that pop up during the stay.
Guests check in using a digital lock that doesn’t need a key, and can download a mobile app to get information about the property and communicate with TurnKey employees. TurnKey will soon have an app also keeps property owners updated on bookings and payments.
Clark, who is TurnKey CEO, moved here from San Francisco because the founders felt that Austin was a better place to build the business. The service was launched in Austin in January, and currently has about 40 properties listed.
“There are so many festivals and events that bring people here, and there are more than 4,000 vacation rental properties that are potential targets. That’s a big, big market,” he said. “In addition, Austin has been very progressive with its short-term rental licensing. Other cities aren’t as favorable because the government hasn’t worked out how to treat them.”
The seven-person company plans to use the funding to enter new cities this year and to hire more employees, especially sales people and account managers.
Ross Buhrdorf, chief technology officer of HomeAway, said TurnKey is one of a crop of Austin startups that is springing up to serve HomeAway customers and the larger vacation rental industry.
He said they include VacationCake, which specializes in vacation rental management; and Uberoom, which provides home decor for hotel rooms, vacation rentals and bed and breakfasts.
“It’s the second wave of people starting businesses, and that’s great for the local ecosystem and for the local economy,” Buhrdorf said.