If you rent a townhouse at Tamarack Resort through the website of McCall’s Valet Vacation Rentals, you’re using software made by a Boise company.
That company, LiveRez Inc., says it has grown to become the nation’s largest cloud (Web-based) solution provider for the vacation rental property management industry.
Launched by Tracy Lotz in January 2008, LiveRez has more than 550 property management clients — or partners, as the company prefers to call them — from Florida to Idaho and Hawaii.
LiveRez provides its partners with a turnkey Internet presence, including individualized websites, property-search tools and online booking for vacationers, and back-end business services including customer contact, follow-up tools and accounting integration.
Lotz, 50, the president, CEO and majority shareholder, talked at his corporate office off Chinden Boulevard in west Boise.
Q: What was your background before LiveRez?
I am what you would probably call a serial entrepreneur. I grew up in southern California right down next to the Los Angeles Harbor in a little town called Harbor City. I started my first business when I was 18 years old, hauling trash off construction sites with a truck I bought for $700 from a lumberyard. I was doing physical labor, and then I moved into some heavier equipment, concrete work and some construction.
In 1984, I started a company called Crystal Vision Packaging in Torrance, Calif. I sold that company in 1989. Then I started another company in Torrance — Lotz Industries — that recycled rubber and turned it into a coating that went over old concrete. I sold that company to one of our customers in 1994.
About that time, my mother was struggling with cancer. I went to my brother’s house in San Diego for our last Thanksgiving together. My brother showed me this thing called the Internet. I didn’t even own a personal computer at that time, but I was fascinated as we logged on to this new website called Yahoo! and searched for cancer information. I told my brother: “This thing is going to change the world. You watch, in a couple years you’ll be able to buy a plane ticket on this.”
I went home, bought my first computer at age 34 and dug into the Internet. I pulled out a yellow notepad and starting writing a bunch of notes about what I could do on the Internet. I laughed, “What could I do on the Internet that Bill Gates wouldn’t steal from me?” I went through all these different ideas until I came up with vacation rentals.
From the spare bedroom of our house, I set up a little website, bought a computer server and got set up. The company was 1st Choice Vacation Rentals. This was in 1994, when a guy with a high school education could read Websites For Dummies, and after three chapters I knew as much as anybody else did, because it was all so new.
Q: Why did you come to Idaho?
My wife and I decided to move to Idaho in 1998. I viewed Los Angeles as a place with too many mice and not enough cheese — a pretty packed place. I just wanted to move to a good place to raise our kids. We came up here, looked around and said, “Let’s move.” We brought my 1st Choice Vacation Rentals business with us on the computer. The move was definitely a quality-of-life issue, not a business issue. We moved to Hailey, where we lived for about 10 years.
Q: What were the origins of LiveRez?
In 1998, I met Steve Trover of All Star Vacation Homes in Orlando. He became one of my customers on 1st Choice. He had listings, and we built his first website. In about 2002, Steve came to me and said, “I need a way to take bookings online like Expedia books a hotel.” That booking capability didn’t exist at that time. There was some software out there to help property managers manage their properties, but none of it was online — it was all Windows desktop software sitting on a machine in some guy’s office. We worked on his solution for a few years, and ultimately, around 2005 or 2006, I started getting other managers calling up and saying, “Hey, I want a website like his.”
Q: So initially, your work resulted in a single, one-off website for a client.
A: Yes. That was in 2005. You could search a calendar in real time and actually book the house, but we continued to work on it and add new features. When you book a house, many other things need to happen. The property manager needs to schedule a cleaning and inspection. All the different payments, including the deposit, have to be scheduled. Emails need to be scheduled and sent to the traveler. There’s a whole lot of stuff happening behind the scenes.
At that point, it was still a one-off web-building project for our client, but we had an idea we could develop this into something much larger. We worked for another couple years to make it a [multi-user] application.
Q: How expensive was this one-off project?
A: It was a six-figure effort to do this — in fact, well north of six figures. Our client, Steve Trover, helped in the development and got a good deal. Our goal became to develop a sustainable, affordable product for many clients, so we invested the money and a couple years’ time. Most of these vacation rental managers are small businesses. They don’t have $100,000 to develop this kind of website functionality on their own.
Q: How many people worked with you to initially develop this LiveRez software?
A: It was primarily me and my full-time developer, Jeremy Lotz, my nephew. He did most of the development work, and I was the project manager for those two years. We launched with two clients: Steve Trover’s All Star Vacation Homes in Orlando and a property manager in Sun Valley.
If someone told me in January 2008 that going into 2012 we would still be working on this [LiveRez.com functionality], I would have said “You’re crazy. We’re gonna be done in six months.” It’s clear now that this is ever-evolving.
Q: How many customers do you have today?
A: We have about 550.
Q: Why do you call your customers “partners”?
Because we aren’t successful unless they are successful.
Q: What is your business model?
We get one-half of 1 percent of the total value for every booking transaction. That’s $5 per $1,000. There is also an initial sign-up fee of $4,995. You get a high caliber website and all the software functionality. Through our years of experience doing this, we understand where all the elements need to be on the web page and how it should look. These websites are basically booking machines.
Q: All partners have access to the same software solutions?
Yes, but each one of these property managers runs their business a little differently. There are some custom things we have done for people. We have a development wish-list from our partners that is more than 400 requests deep.
Q: What are the trends in the property-management software-solutions industry?
There’s been a lot of money put into this industry in the last couple of years.
There’s a company in Texas called HomeAway that raised half a billion dollars and went public this summer. They bought two of our competitors’ software companies — Escapia in Seattle and Instant Software in Colorado. They were providing software solutions to professional vacation-rental managers.
Those purchases were the best thing that ever happened to our company. There was some conflict between professional vacation rental managers and HomeAway, which has always catered to homeowners [not professional managers] with vacation properties. So when HomeAway bought those two companies, a lot of professional managers came to LiveRez. They look at Home Away as a competitor.
Q: How do travelers come to your partner websites?
Typically they would do a Google search for site-specific vacation rentals, like Orlando. There, they would see our partners in the Google listings for Orlando vacation homes.
Q: So LiveRez is invisible to the traveler?
Right. He is making contact through an independent property manager who is using our software solutions.
Q: What are your long-term goals?
We are working on a website called RezSecure.com — Trusted Vacation Rentals, Trusted Vacation Managers. It’s up and running. We’re really trying to see what the uptake is. It’s really a soft launch. The website is an aggregator of our LiveRez property managers that have opted in. We’re still playing with this business-marketing model.
Q: Are you charging your partners to be included in this new website?
It’s all pay for performance. We like to say “When the ducks fly, we all hunt.” Our business model follows our partners’ peaks and valleys. If we drive a booking to them from this website, we get a 10 percent booking fee. We are doing all the marketing and the search engine optimization. Our goal is to drive some extra business to our partners in a way that won’t cost them an arm and a leg.
As we work with this new business model, we are trying to determine if we’ll need to establish a call center here in Boise to support our property managers on RezSecure. It might be next year.
Q: You would establish that call center in Boise? It could be anywhere.
Yes, it could be anywhere. But I live here. You know, probably 95 percent of the Live-Rez revenue comes here from out of state. Every nickel that comes here gets paid to people here and gets spent here. I’d like to see us do as much of that as possible.
