The real unemployment rate

Today, the U.S. Bureau of Labor Statistics reported that the U.S. economy lost a paltry 11,000 jobs. With all the fanfare, you would have thought that there was some reason to celebrate. Far from it.

Sure, we're no longer losing jobs at the same pace as at the beginning of the Great Recession, but one in ten people in the labor force is still out of work. Of the 165 million people in the labor pool, that's 16.5 million people that are out of work that are looking for a job and just can't find one. But it's a lot worse than that... The Bureau of Labor Statistics doesn't count people who are employed in part-time jobs to make ends meet or people who are considered to be "discoraged job seekers" and have stopped looking for work altogether - presumably because any family of four can eat off of the $800 subsidy paid twice a month. Yeah, that is, if you like to feed your kids ramen noodles three times a day.

The reality is that our economy, and our labor market, is in shambles. The real unemployment rate is closer to 17.5% when you factor in all the people that have stopped looking or have taken on part-time work just to make a few extra bucks. That's another 12 million people that can't find suitable full-time work. At a "full-employment" rate of 5% unemployment, our economy would have about 8 million unemployed people. There's nearly 20 million more people unemployed than there was when our economy was at full employment a couple years ago. That's freightening.

So, what's one to do if they can't find full-time work or refuses to don the orange apron at Home Depot or the blue apron at Wal-Mart for 25 hours a week and no benefits? Well, many people have turned to eBay to sell there stuff. In the last year, the number of online auctions on eBay has more than doubled. The average daily auction volume in August, 2008 was 15 million auctions. In November, 2009 it was close to 35 million. eBay is as popular as ever because it's a great place for people to make some extra cash. People are selling their stuff in droves.

The unemployed and underemployed are also turning to direct selling and Multi-Level marketing companies in droves. Amway, Tupperware and Avon have all experienced record growth in the ranks of their agents/salespeople. When times are tough, Americans become ultra resourceful. Door to door selling is even making a comeback. Who would've thought? I guess if people aren't at a job, then they're at home, so why not...

Speaking of resourceful, people are also getting into the hospitality business. I recently counted the number of short-term rooms for rent posted on Craigslist. These are rooms for rent by the day - not by the month or by the year. These are people looking to make a few extra bucks by providing lodging services to travelers. I found that on a typical weekday there are more than 1,000 new ads posted for short-term rooms for rent. This is more than double the number from just a year ago. Craigslist lacks essential security features to make it a fully functioning lodiging classifieds site, yet people are willing to take the risk to make a few extra bucks by renting out their extra space to travelers.

Americans possess an unprecendented amount of unused space in their homes. Resourceful people all around the country are learning that they can monetize their unused living space by getting into the hospitality/lodging business. People are running make-shift B&Bs as a way to avoid foreclosure. Not a bad idea if you ask me...

Mint.com posted a humorous video that discusses the real unemployment rate on YouTube.

Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

415-997-9925 Google Voice
russ.hearl@staysherpa.com
www.sherpatravelexchange.com

Stay Smart. Stay Sherpa.

Project update

Hi everyone, it's been a while since my last post, so I thought I'd drop you a line to let you know what we've been up to. In the last month we've made considerable progress in building the Sherpa home based lodging marketplace. Designing and developing a complex product like this is challenging when you consider that we're building it for mass market adoption. During the last month we found a great software engineer, nearly completed the front-end design of the site and have been hard at work at programming the interface. We also participated in a VC competition that gave us many more ideas to enhance Sherpa's product ease of use and competitive advantage.

Simultaneously, we are ramping up our sales and marketing activities to line up key partnerships that will be important participants in our launch. We are also hard at work building an inventory of great homestays, B&Bs, vacation rentals and home exchange properties.

The early 2010 launch of Sherpa couldn't come at a better time. People around the world are struggling through this difficult recession and are in need of a life- line. Sherpa will extend a life-line to millions of people by providing them with a way to market their extra living space to travelers in search of a more authentic and personal travel experience. Homeowners and tenants around the world possess an unbelievable amount of unused space that can be monetized by accommodating travelers. With real unemployement hovering around 17.5% in the U.S., many people are looking for new and innovative ways to make some extra cash as they seek their next full-time job or work their way through an educational program that will help them change careers.

Over 50 million trips were booked this year in the U.S. alone where the accommodation type was someone else's home... and not a hotel. That includes vacation rentals, B&Bs, homestays and home exchanges. We're building a product, and a company, that is going to help millions of homeowners get into this market and compete for these paying guests. We welcome your feedback and questions.



Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

415-997-9925 Google Voice
russ.hearl@staysherpa.com
www.sherpatravelexchange.com

Stay Smart. Stay Sherpa.


Follow Lucky the Sherpa on Twitter

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Home based lodging: A recession proof business

The last couple weeks I've been presenting and pitching Sherpa Travel Exchange to investors, potential vendors and just about anyone that will listen to me. Sometimes people have an instinctive reaction to the concept of home based lodging (housing paying guests in your primary or secondary home). The home based lodging market is a lot more than just 22 year olds backpacking around and crashing on each other's couches (ala Couchsurfing.org). This market consists of any type of lodging services provided in one's own home as opposed to a hotel, including: B&Bs, Homestays and Home Exchanges.

The market is actually a $5B+ market in the U.S. alone. With respect to B&Bs, the Professional Association of Innkeepers International cites more than 17,000 B&Bs in the U.S. generating more than $3.4B in revenue. Millions of people each year stay at B&Bs, while the owners sleep in a room nearby. Many consider B&Bs to offer a more authentic local experience than hotels. We agree. Which is why B&Bs will be a major component Sherpa - not only existing B&Bs, but enabling ordinary homeowners to create a make-shift B&B in their own homes to earn some extra cash. The B&B market niche as a whole has proven to be recession proof as money conscious travelers seek more affordable alternatives to boring, sterile and expensive hotel rooms.

I did a quick scan of Craiglist yesterday and found more than 500 new listings posted that were advertising rooms for rent by the day in someones home. Yes, there are lots of people that want to earn a few extra bucks by taking in paying guests. For many of these people it's a better alternative to getting a full-time roommate. But, for all the great things you can do on Craigslist, it lacks important peer to peer reviews of hosts and guests, online booking, background records and other critical pieces of information most people would require to feel comfortable running a make-shift home based hotel/B&B. We are creating some exciting innovations in this regard. Stay tuned...


Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

415-997-9925 Google Voice
russ.hearl@staysherpa.com

Stay Smart. Stay Sherpa.

Follow Lucky the Sherpa on Twitter: sherpatravelx

Check out our Facebook page: www.facebook.com/home.php?#/pages/Sherpa-Travel-Exchange/123269124279?ref=ts

Sherpas aid in fight against global warming

Check out how Sherpas are guiding a delegation of scientists and policy-makers up Mt. Everest to Base Camp...

http://www.fresnobee.com/world/story/1695297.html








Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

415-997-9925 Google Voice
russ.hearl@staysherpa.com

Stay Smart. Stay Sherpa.


Follow Lucky the Sherpa on Twitter: sherpatravelx

Check out our Facebook page: www.facebook.com/home.php?#/pages/Sherpa-Travel-Exchange/123269124279?ref=ts

Hostage – At The Mercy of the Hotel Giants

Last Spring, I took my 12 year old son up to Reno to play in a 3 day basketball tournament. This meant that I had to find a room for us to stay in. There were not many hotels that were walking distance from the basketball venue, so we were stuck with the decision of staying far away which meant driving through traffic to each game and paying for parking each time, or staying at the adjacent hotel and being left at their mercy regarding price and accommodations. In order to get a good price, I had to play the old hotel game of booking a room, checking pricing every day, and being prepared to cancel and re-book when the price came down. I also had to worry about the room I would end up in.

I later came to find out that this was a small, run down and bed bug invested hovel standing in the parking lot of the main hotel. It was easy to see that the hotel considered people in these accommodations to be second-class citizens. Reading the reviews also led me to another conclusion. The Motor Lodge was just a ruse to get people into the hotel. When people actually arrived and saw how bad it was, they immediately complained and asked for an upgrade. And, for an additional fee, the hotel would accommodate them. I, personally, thought it was misleading and out right robbery.

Well, let me tell you. Hotels are designed to be at or close to capacity at all times in order to meet their revenue goals. This means they will do anything they can think of to bring in more money. Second, the hotel industry has gotten away with having no real competition for years. Taking a look at the numbers, there are about 4.4 million hotel rooms in the United States. Matching this with the fact that hotels like to stay close to 70% full or more, means whenever it is believed a hotel can attain a profitable occupancy rate, one is built. In short, whenever hotel occupancy rates are good, the hotels are free to treat people like trash, because they know they will make their money any way. However, when occupancy rates fall, the hotels are forced to treat their customers better.

Try a Homestay. Yes, you heard right. More and more people are staying in other people’s homes when they take a trip. The accommodations are often better, the price is always better, and your options are unlimited. That is, if you can find a good source for Homestays. That is where companies like Sherpa Travel Exchange come into play. Sherpa will soon be offering a “Travel Exchange” focused on Homestays, Home Exchanges and Vacation Rentals. With 60 million homes in the United States, and 90 million vacant rooms, the inventory potential is huge. If just 5% of the available rooms were up for rent, the number of rooms available to travelers would double. Now this is something that would get the hotel industries attention.

So, my advice to you is to not get caught up in the games of the hotel giants. Don’t get stuck, like a hostage, at the check-in counter asking for a better room because they will stick you in a dump while they wait for you to beg and pay for a better room. Think about a Homestay and get treated like a real person by a knowledgeable local host the next time you travel. Until next time, happy travels.

Darrin Underwood

Contributor

Sherpa Travel Exchange

Follow Lucky the Sherpa on Twitter: sherpatravelx
Check out our Facebook page: www.facebook.com/home.php?#/pages/Sherpa-Travel-Exchange/123269124279?ref=ts

What is a Sherpa?

I thought you’d never ask.

Sherpa is a Tibetan word that stands for “eastern people.” The Sherpa people are an ethnic group living high up in the Himalayas in Nepal and parts of India. People commonly refer to a Sherpa when they speak of mountaineering porters and guides that escort adventurous hikers up the treacherous slopes of Mt. Everest. Stories such as “Into Thin Air” by Jon Krakauer depict Sherpa mountain guides as trustworthy, knowledgeable and tough as an ox. Sherpas are renown by the international climbing community for their expertise and experience at high altitudes. For all the stores about Sir Edmund Hillary’s first recorded Mt. Everest ascent, stories about the heroic life-saving efforts of Sherpas are few and far between. Nevertheless, climbers couldn’t scale the icy slopes without the intimate local knowledge of their Sherpa guides. Sherpas are the unsung heroes of mountaineering.

Sherpa Facts

Official language: Dialect of Central Tibetan.
Population: The 2001 Census in Nepal counted 154,622 Sherpas. Sherpas also live in the Darjeeling and Kalimpong in India.
Traditional Clothing: Robe-like garments made of woven woolen cloth known as “Chuba” are worn by Sherpas to keep warm in the harsh winter climate.
Interesting Factoid: In May, 2009, Apa Sherpa successfully climbed Mt. Everest for the 19th time.

Why “Sherpa” Travel Exchange?

We thought about calling our innovative new company Scooby-Doo Travel Exchange or some highly descriptive utilitarian name like Rentyourextraspace.com, but we just didn’t think those names exuded any character or embodied the ethos of the company and its Founders. So, we decided to create a modern, contemporary brand around the Sherpa mascot and the values that Sherpas represent to their patrons and the larger Himalayan community. From a business standpoint, we think an engaging, humorous and helpful Sherpa mascot gives us a chance to differentiate ourselves from current and future competitors. So, we named our mascot “Lucky the Sherpa” because we think that if you use Sherpa Travel Exchange that you will “Get Lucky” by spending less on travel or avoiding lodging costs altogether through our Sherpa Home Exchange program.

Thank you for visiting Sherpa Travel Exchange and may your journey be safe, rewarding and memorable.

Sincerely,

The Sherpa Travel Exchange Team

Couchsurfing

Earlier this year I took some time out to travel the world. I met amazing people with whom I shared memorable experiences. However, I couldn't help but wonder whether I was getting the *real* feel of the cultures of the cities and countries that I had visited or some commercialized facsimile. Nearly two months into my trip I met some travelers in their early 20s while traveling through Switzerland. When I asked what hotel or hostel they were staying at they said they weren't staying at any hotels or hostels on their 6 month trek. Puzzled, I asked them if they were camping. They told me they were "couchsurfing." They continued to say that they joined the Couchsufring.org project so they could avoid spending money on hotels and hostels by crashing on someone's proverbial couch (in most cases, someone's extra bedroom).

Intrigued, I decided to check this out by visiting Couchsurfing.org. I was surprised to see that Couchsurfing has more than 1.4 million members from around the world and they have facilitated millions of cultural exchanges. The leaders of the Couchsurfing project states that the goal of Couchsurfing is to foster cultural exchange, goodwill and understanding. This simple concept has really taken off and Couchsurfing is experiencing a meteoric rise in memberships.

I subscribe to several blog feeds through Google Alerts, and judging by the sheer volume of people writing about Couchsurfing experiences, I would say that it represents a a significant sea change in the hotel business. I'm not saying that Couchsurfing is for everyone, because it clearly favors the adventurous. Couchsurfing is great for those people who favor an authentic cultural experience rather than a run of the mill tourist experience provided by most hotels and resorts. I used to work in the hotel industry and many of the hotels receive kick-backs from local restaurants and attractions for referrals. So, you gotta wonder if you are getting legitimate recommendations from a hotel concierge or front desk clerk.

Here's a good article that speaks to the virtues of Couchsurfing.

http://wildcat.arizona.edu/wildlife/students-build-global-community-by-hosting-strangers-on-couches-1.794753

Couchsurfing aside, the U.S. Census Bureau's American Community Survey found a 9.8 percent rise in cohabitation in the U.S. during the last year. Driven by higher unemployment and foreclosures, people are deciding to take in roommates or share their homes. Sherpa will help ordinary homeowners monetize their unused space by competing with hotels for paying guests. With more than 90 million unused rooms in American households, we think Sherpa has a good chance at doubling the lodging supply in the U.S. by helping people monetize their unused rooms. Stay tuned...

Russ



Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

415-997-9925 Google Voice
russ.hearl@staysherpa.com

Stay Smart. Stay Sherpa.

Follow Lucky the Sherpa on Twitter: sherpatravelx

Check out our Facebook page: www.facebook.com/home.php?#/pages/Sherpa-Travel-Exchange/123269124279?ref=ts

What Should I Do With My Timeshare?

What should I do with my timeshare?

That is the question facing thousands of people these days, especially with the downturn in the economy. Nobody wants to sell their timeshare for ½ of what they paid for it, but that may be the best thing to do. Let’s do the math. Say you paid $16,000 for your timeshare, and you are paying $600 a year for maintenance. Let’s also say that you can only sell your timeshare for $8,000. That means that you would lose $8,000 right? Not necessarily. At $600 a year for maintenance, you will pay almost $8,000 in $13 years (not including banking and timeshare location switching fees). If, however, you keep your timeshare for the next 20 to 30 years, you will pay $12,000 to $18,000 in maintenance fees; and that is if the fees do not go up. Yet, your timeshare will not be worth much, if any more money. So, my short answer is, sell it.

What if I don’t want to sell? Well, if you do not want to sell, then my suggestion would be to quit banking it through your timeshare management company. These companies charge up to $300 membership and another $150 transaction fee each time you want to travel to a different destination than the original purchase. Not only is it expensive, it is also difficult to find places, through your timeshare management company, that you really want to visit. Well, what should I do? Read on.

Whether you decide to sell your timeshare or keep it, you can save money and increase your travel options by finding someone to exchange your home or timeshare with that is located in the destination you want to travel to. Yes, you heard me, exchange your home or timeshare. Thousands of people are doing it these days and virtually staying for free all around the world. Websites like Sherpa Travel Exchange www.staysherpa.com have created a travel exchange that brings together interested parties for Home Exchanges, HomeStays and Vacation Rentals. The great thing about exchanging your timeshare is that you no longer have to worry about banking it due to an impending expiration date. Instead, exchange it with another homeowner or property owner so they can use your place now, and you can use their place at a later date.

The concept for exchanging homes has existed for years. However, the rise in high-speed internet and social networking has made it easier for people of common interests to connect. Keep an eye open for “Lucky” the Sherpa as he develops an easy way for you to get the most out of your timeshare if you plan to keep it, or get the most out of your travel dollars if you plan to sell it. Either way, you can’t lose.

Darrin Underwood
Contributor
Sherpa Travel Exchange

Stay Smart. Stay Sherpa.

Follow Lucky the Sherpa on Twitter: sherpatravelx

Check out our Facebook page: www.facebook.com/home.php?#/pages/Sherpa-Travel-Exchange/123269124279?ref=ts

Ponzis and Pyramids

Congress is set to pass another extension to the Federal unemployment benefits program. Now that the nation is approaching 10% unemployment, our government believes its a good idea to continue to extend the safety net. The news of the unemployment benefits extension got me thinking about what people do to make ends meet when they are unemployed or under-employed. So, I looked at the Bureau of Labor Statistics site (www.bls.gov) and found that for everyone one person that's unemployed in the U.S., there's at least one person that considers themselves "under-employed". That translates to more than 33 million working adults that aren't able to work as much as they'd like to.

One only needs to look at eBay to see the fallout of prolonged unemployment. In August, 2008 there were 15 million average daily auctions on eBay. In August, 2009 there were 30 million average daily auctions on eBay. People are selling their stuff to generate cash to survive.

Desperate times call for desperate measures for millions of people.

We've been hearing a lot about Ponzi schemes lately and it got me thinking about how people get involved in both illegal Ponzi schemes and borderline illegal multi-level marketing pyramid companies like Amway. People are trying to make an extra buck or two, which is why MLM companies like Amway exist where the members recruit other agents, who recruit more agents with everyone making a cut of the sales by their recruits - all the way down the pyramid.

In case you're curious about the origins of the term "Ponzi" scheme, it actually has nothing to do with my hero, Fonzi. Of course, Fonzi was the the always cool ladies man who I so desperately want to be . Charles Ponzi was an Italian immigrant to the U.S. who's likeness is associated with the get rich quick scams that he is so infamously associated with. Investors seeking abnormally high returns make investments in a fund that oddly generates a much higher rate of return than typical funds. Eventually, the fund manager running the Ponzi scheme can no longer afford to pay out the returns and the fraud becomes apparent. If you're trying to augment your income, try and stay away from anything that sounds too good to be true. It might turn out to be a Ponzi scheme.

Some people turn to other get rich schemes they find on the internet like the ones that promise you can earn thousands of dollars per week from the comfort of your own home. All you have to do is make a small investment - which is often where you get fleeced. Some people sell Tupperware, Longaberger Baskets, or Pre-Paid Legal services
to try and make ends meet. All of these involve making a pretty significant investment in time and/or money to actually make a decent income.

Sherpa has an idea that we think will prove to be the best way to earn some extra cash. There are 67 million homeowners in the U.S. with over 90 million unused rooms. Sherpa is going to help homeowners monetize those unused rooms by listing these rooms as Homestays. SmithTravel Research reports there are 4.8 million hotel rooms in the U.S. If only 5% of the unused rooms inside American homes become monetized on Sherpa, the lodging supply in the U.S. will more than double. This dramatic increase in supply will provide millions of homeowners with additional income and will make travel more affordable for so many more people. In doing so, Sherpa will address the growing demand for travel and empower millions of people to augment their income and earn a decent living.

Russ


Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

415-997-9925 Google Voice
russ.hearl@staysherpa.com

Stay Smart. Stay Sherpa.

Follow Lucky the Sherpa on Twitter: sherpatravelx

Check out our Facebook page: www.facebook.com/home.php?#/pages/Sherpa-Travel-Exchange/123269124279?ref=ts

Timeshares - Do The Math

If I knew then what I know now…

When my wife and I got married 14 years ago, we took off to Hawaii to spend a week in Kona and a week in Kauai. Our accommodations were in a timeshare owned by my wife’s parents. Staying in a timeshare vs. a hotel made sense; we had multiple rooms, a kitchen for cooking and a BBQ outside. What more could you want? Well, staying in a timeshare does mean one thing for sure; sometime during your trip, you will be pitched on buying a timeshare also. We were no exception.

During our 2 hour timeshare presentation, we were told of the wonders of ownership, and how much money it could save vs. spending thousands every year on accommodations. We were also sold on how we could either sell it if needed, or pass it on to our children, like a summer home. We were also told that we could use our place to trade to hundreds of additional locations if we chose to. Needless to say, my wife and I, like thousands of other people, thought it sounded good. We figured we would start small and buy into 1 week every other year on a 1 bedroom place. Hey, as a bonus, they threw in an extra week for the first 10 years to make it a no-brainer.

It was not until later that we discovered the error of our ways. Doing the math and looking at the reality of the timeshare market really opened our eyes:

1. $7,500 buy in for 1 week every other year

2. Add $2,500 if you finance the transaction

3. $300 per year for maintenance fees

After 10 years, we had spent $13,000 to own a vacation that we had barely used. To top it off, our investment was worth about $3,000 on the open market. Hmmm, not the best use of our hard earned money.

The things that we did not think about were total cost of ownership, our future travel plans and alternatives to the timeshare. Total cost of ownership includes the cost of getting to a far away location for your vacation, and those darn maintenance fees, which really add up. As for future travel plans, what if we did not want to go to that condo on that island? Well, then, we were given the option to trade our place in, bank the days and use them elsewhere. Sounds easy, right? Wrong. There is actually a $300 fee associated with banking your place with the management company. Add to that, a $150 fee for each banking and switching transaction you do. Like something wrapped in aluminum foil and lost in the back of the refrigerator, this is starting to smell bad.

What could we have done? Well, one thing we could have done is saved our $13,000 plus, and swapped our home when we wanted to vacation. What? Swap your home? Yes, you heard me right. To our credit, the internet was not all that large and fast 14 years ago. Getting information was tough, and looking for a house swapping partner was a tough and inefficient process. Today, however, things are different. Companies like Sherpa Travel Exchange (http://www.sherpatravelexchange.com/) are putting together solutions to help travelers see the world for far less than was possible before. Don’t get me wrong, people have been exchanging their homes for years. The problem came from the lack of communication and ease of process needed to make it mainstream. This era of high speed and wide spread internet, along with the surge in social networking is changing the landscape. Finding a home exchange, a homestay, or a vacation rental is now easier than ever, and it will only get better. To top it off, imagine staying anywhere you want for as many nights as you want for the price you spend on a tank of gas. It is possible, see below and Lucky the Sherpa will show you how.

My wife and I have since sold our timeshare. This has freed up some cash, and opened our travel possibilities far wider than we could have had we stayed locked in to the very controlled world of the timeshare. My advice to you is, if you do not own a timeshare, keep it that way. If you do own one, then see my next piece titled “I Feel Stuck - What should I do with my timeshare?”

Darrin Underwood

Contributor

Sherpa Travel Exchange

Follow Lucky the Sherpa on Twitter: sherpatravelx
Check out our Facebook page: www.facebook.com/home.php?#/pages/Sherpa-Travel-Exchange/123269124279?ref=ts

Herding Cats

Have you ever heard the expression "It's like herding cats"? Well, if you've ever tried to herd cats you'd know exactly what the expression means... as much as I love cute little kittens, you just can't seem to get them to work together for a common goal.

The same can be said about the vacation rental market. As a legitimate competitor to hotels, the vacation rental industry has grown to reach $24 billion U.S. in annual bookings. Not too shabby for an industry that's mostly comprised of individual second homeowners and about 7,000 vacation rental property management companies that either own their own vacation rental houses/condos/villas or represent the properties of private homeowners. Trying to standardize practices in a fragmented market niche such as the vacation rental niche is like herding cats.

Nevertheless, several intermediaries and technology providers are working hard to add a common set of business practices and processes to move vacation rentals into a mainstream lodging option that competes with hotels. Here's an example of what I mean.

This is Fleet Week in San Francisco. This weekend we have the pleasure of welcoming more than 1.5 million tourists into our city to watch the amazing Blue Angels fly over the San Francisco Bay and through the Golden Gate while the deftly maneuver their $500 million fighter jets within mere centimeters of each other. A quick scan of Craigslist shows that there are still several vacation rental condos and homes available for this weekend - some with an asking price of $3,000 for two nights. If I were a traveler that could afford this rental I would be asking myself, "how do I book this place." Travelers have become accustomed to booking hotels online. Yet, when it comes to vacation rentals, PhoCusWright says that only 15% of vacation rentals can be booked online.

If I wanted to book the San Francisco vacation rental home I would have had to bring a suitcase full of cash or find a way to overnight a large deposit to the property manager. Both of these options are more hassle than they're worth, so most people opt for a hotel.

Back to my original point, most vacation rental properties are marketed by homeowners or the property management firms they hire. The current recession means that these homeowners and property management firms are exceptionally motivated to find ways to increase their bookings. Several sites have sprung up that offer homeowners and property managers with exposure to travelers that might want to book their vacation rental homes. The most noteworthy site is HomeAway.com and their collection of vacation rental sites (including vacationrentals.com and vrbo.com). These are noteworthy not just because they drive more traffic to their sites than any other vacation rental intermediary, but because they have received more than $500 million in venture capital from several big time VC firms. That's quite an endorsement of their business strategy and market opportunity.

Anyhow, HomeAway has recognized that the vacation rental market niche is the next frontier in online travel. Given the relative under-development of the intermediary portion of the vacation rental value chain, there's plenty of room for competition. The intermediaries that can herd cats by offering homeowners and property managers solutions that drive bookings and simplify the process of managing a vacation rental home will ride the growth wave that is likely to follow.

Sherpa will drive standardization of business processes through providing an innovative online booking model for homeowners and vacation rental property managers that will enable them to earn extra cash and compete with hotels.

Looking forward to reading your thoughts and ideas.


Russ




Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

415-997-9925 Google Voice
russ.hearl@staysherpa.com

Stay Smart. Stay Sherpa.


Follow Lucky the Sherpa on Twitter: sherpatravelx

Check out our Facebook page: www.facebook.com/home.php?#/pages/Sherpa-Travel-Exchange/123269124279?ref=ts

Questionable hotel security

Last week I wrote a post entitled "Creepy Roommate Stories" where I implied that having roommates can really suck. Although it's often necessary to have a roommate in places like London, New York, Tokyo or San Francisco, it can definitely be a major privacy invasion. In that post I told you about a roommate that drilled a hole in my bedroom wall, presumably for ventilation... Of course, his motive was more perverted than that. That's creepy. Anyways, that guy was kicked out shortly thereafter.

Sherpa contributor Darrin Underwood forwarded me an article this morning that shines a light on issues with hotel security and an incident with a well known, and attractive, ESPN personality named Erin Andrews.

http://news.yahoo.com/s/ap/20091007/ap_on_en_tv/us_espn_andrews_video_hotel_security

As I speak with more people about Sherpa's home based lodging platform I've learned that the first concern that people raise has to do with security. After all, if you are operating a make shift hotel from the comfort of your own home, how would you know if the guest you are hosting is a sex offender or had a capricious criminal record? These valid concerns got us thinking about methods that traditional hotels use to safeguard your safety in an attempt to come up with some ideas to apply to Sherpa customers. What we found... or didn't find... raised some serious questions about hotel security.

More than 10 years ago I studied the hotel business as the primary subject matter of my travel and tourism undergraduate degree. I knew that there were some primitive methods that hotels use to safeguard your identity and security so it would be difficult for someone to walk up to the front desk and find out if you're staying at their hotel or obtain a room key to your suite. However, that's the extent of most security procedures. There's no way of knowing whether the person in the adjoining room next to you is a criminal, sex offender, communist (Glenn Beck thinks I should be afraid of these people, so I guess I ought to be :)) or some other unsavory sort. The article referenced above sheds a bright light on hotel security, or lack thereof.

Which is why we are going to take things several steps further by providing homeowners with a free sexual predator record search on any traveler/lodger that they host in their part-time hotel, vacation rental or their home exchange experience. We will also provide homeowners with the ability to conduct a criminal background search and we will feed this information back into the booking record so our homeowner customers can quickly assess any risk and make a decision to accept or reject the booking based on this information. We think this gives home based hoteliers better control and makes home based lodging safer than staying in a hotel where the person staying in the room next to you might be a wacko and you would never know it.

Russ

What Was Old Is New Again

I recently read an article that discussed the unusual perks being offered by hotels to draw in new guests. Hotel managers are offering everything from a $100 voucher towards a tattoo, to a Harley Davidson motorcycle to use during your stay. One hotel, the Four Seasons Hollywood, is offering your choice of a Mercedes, BMW, or Porsche to drive during your vacation. What is the reason for all of these creative new ideas, you may ask? The answer is “the worst economic conditions since the Great Depression”.

As a matter of fact, hotel occupancy is down to 60% of normal booking activity, the lowest percentages since the 9-11 terror attacks. Many people are pointing out the fact that we went through a hotel building boom, in the years preceding the Great Recession. Also, businesses have cut back on the amount of business travel they are allowing their employees to do in person. While all of these things are true, there are other reasons for the decline of the hotel industry that are less conspicuous.

Years ago, before the advent of planes, trains and automobiles, it took a lot longer to travel from point A to point B. A 100-mile trip could take up to 2 weeks depending on conditions. During those times, travelers looked more to the generosity of people they met along the way to make their long trip feasible. Family farms and small town homes would open their doors to strangers for the night, cook them a meal and charge them a reasonable price for the service. Since this was not the primary business of these kind hosts, they could charge a price that would work out well for both them and the traveler.

Fast forward to modern day times and mega hotels. Filled to capacity rooms and charging large fees are the only way most hotels can make a profit. Because of this, they are strategically located in areas of high-need so they can do one thing; make money off of limited supply. The problem with this arrangement is that you and I are at the mercy of the hotel chains. Most travelers need a hotel room at the same time other people need it which drives up our costs even more. In addition, most hotels are limited to areas of high traffic. If you are looking to get off the beaten path, then your choices decline severely. This is where the “old has become new again”.

There are still plenty of kind people out there willing to open up their home to a traveler for a reasonable price; just like 200 years ago. And, with all of the “make money from home scams” going on during these tough times, people are discovering that it is pretty easy to make some extra cash if they are friendly, and have a spare room or couch for someone to crash on for the night. It is not rocket science.

Contrary to many thoughts about the economy, people are not taking fewer vacations than they used to, they are just getting smarter about how they travel. People are vacationing closer to home, and driving instead of flying. They are also looking for less expensive options, and what I like to call alternative accommodations. Crashing in the spare bedroom of a stranger, or exchanging homes with a like-minded family are two of the alternative travel options that are becoming a lot more popular, especially here in the United States. Many home exchange websites are seeing 20 to 35% increases in the number of listings they have in just the last year. This is a number that would make the hotel chains heads spin.

The only problem with this model is the lack of proper exposure and organization around the process. Yes, if you have heard of Home Exchanges or HomeStays before, then you should be able to find your way around. But, there are millions of us who this is new to. Most of us would not know where to start if you said the words Home Exchange to them. However, this is also something that companies like Sherpa Travel Exchange are looking to change. Everyone knows that, if given the information and guidance to travel easy and cheaply, people will do it. Look for us as we get things going with “Lucky”, the friendly Sherpa over the next couple of months.

Darrin Underwood

Contributor

Sherpa Travel Exchange

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