Like most people in the multifamily industry, I am currently in that intense catch-up between last week’s National Apartment Association (NAA) Education Conference in Las Vegas, and the impending holiday weekend.  It leaves precious little time for reflection on another highly successful and informative event, but here I will share a couple of thoughts.

As usual, the show was excellent: well-executed to high production values.  The sessions were well-attended and varied, and one cannot fail to be impressed with the organization’s initiatives in support of training and ongoing development of people.

This year’s show was synonymous with the Apartments.com media deluge.  Anyone travelling from McCarran Airport to the Vegas strip, or from one hotel to another cannot have failed to have seen at least one advertisement featuring Brad Bellflower – the fictitious Silicon Valley technology visionary created by actor Jeff Goldblum.  My hotel was about seven minutes – or alternatively three Brad Bellflower commercials – away from the conference venue.  So I got to see most of what this campaign had to offer from the back seat of my taxi.

The desire to flood the conference and the surrounding airwaves with ads is easy to understand.  NAA is the largest group of property managers of the year in multifamily, and with parent company, CoStar’s acquisition of both Apartments.com in 2014 and Apartment Finder earlier this year, this is clearly the right time to be raising profile of the Internet Listing Service (ILS) industry, as it seeks to establish a dominant presence.

Among the general buzz, the most interesting insights came from private discussions with property management companies.  Nobody has seen investment in media on this scale before, so collective attention turns to the likely outcomes.  On the one hand, the unprecedented media coverage publicizes the sector - which should help companies to attract customers and talent.  On the other hand, of course, the staggering costs of this campaign must be recouped somewhere, leading to some trepidation as the bill will surely be presented to operators before long.

But the most interesting thing – to me, as a veteran of the travel industry – is the discussion unfolding about some of the campaign’s messaging.  One item in particular: “Change your apartment, change the world”, appears to have generated some discussion. It could be viewed as a slogan that makes apartments more exciting.  But the idea of encouraging residents to change apartments is also unnerving.  Apartment communities go to great lengths to retain their customers – and with good reason, given the costs of acquiring new residents. 

The discussion reminds me of a similar debate that has played out in the hotel industry for several years.  Around the turn of the century the OTAs (Online Travel Agencies) took control of a share of the travel industry’s route to market, which it has never relinquished.  The emergence of huge intermediaries like Expedia and Priceline has been the subject of industry studies, articles and fierce debate at industry conferences.

At the heart of the debate is the question: “Who owns the customer?”  Hotels had always owned the experience from booking to checkout and beyond (given extensive investment in loyalty marketing).  But as customers’ research and booking behavior has gravitated towards the web, those who provide the best booking experience have become an increasingly important part of the overall customer experience.  The environment in which OTAs emerged was quite different from today’s multifamily industry, but it’s worth considering the parallel.

At MDX we have long advocated the need for Multifamily to learn some lessons from hotels.  But we are also acutely aware of the differences between the industries – a great example of which is renewals – a critical area that is under-served by industry analytics.  We should strive to find ever smarter ways to find new residents, but it’s risky to do so at the cost of renewals conversions.  If the hotel example is anything to go by, the tension between operators and intermediaries will grow over the coming years. And property management will have to adjust to new sources of competition over its customers.

In the meantime we all look forward to next year’s event, which will be held in San Francisco.