Larry Starr, president of ResortQuest Southwest Florida, was in his office one recent morning, fielding calls on two phones, reading e-mails and talking to a manager about a gutted condominium that had to be finished the next day so vacationers could check in. Starr was also finalizing a real estate deal. In three days he would be buying the Silver Sands Gulf Beach Resort on Longboat Key, adding one more property to the thousands he manages or owns.
"It's non-stop," he says. "We start at a gallop every day." Still, he looked unruffled for a man who had been awake since 3 a.m. and had answered 80 e-mails before he left the house.
Starr, 44, is the undisputed master of the fast-paced vacation rental market in Southwest Florida. He manages 2,400 properties-800 of them in Sarasota and Manatee; a number, he adds, that " is forever increasing." He employs a staff of 200 in 24 offices, stretching from New Port Richey to Marco Island. Last year, just under 50,000 guests stayed in the properties he manages, usually beautiful homes and condos on the water or a golf course.
He is also one of Southwest Florida's top bed tax collectors, booking more room nights annually in resorts, condos and homes-more than just about any other hotel, motel or rental agency in every county where he operates. His occupancy rate from January through March runs xxxx percent. "I would say 85 percent or better is good," he says. "After 9/11 people were happy with 50." The 242-room Radisson Lido Beach Resort, by comparison, booked approximately 51,000 room nights in 2003. Starr's revenues totaled $30 million last year, and he paid about $900,000 in bed tax and about $2.1 in state sales tax. (The 242-room Radisson paid about $240,000 in bed tax in 2003.) "He's always in expansion mode and he's always going 150 miles per hour," says his day-to-day manager, Kevin Lawler, vice president of ResortQuest Southwest Florida.
Starr's office is in a tiny strip center on Longboat Key, but it's hard to catch him at his desk. He's usually on the road (ironically, he dislikes traveling), and figures he took three vacation days in 2003. But he's not complaining. Other than his six-year-old daughter Hannah and his fiancée Robin Sabattini, director of real estate sales at The Renaissance and Alinari, he says he doesn't really have outside interests. Work consumes him.
And Starr is busier than ever. ResortQuest International Inc. (NYSE:RZT), headquartered in Destin, Fla., with four percent of the $10 billion a year nationwide vacation market and probably the most recognizable name in the vacation rental business, has just been bought for $177 million by Gaylord Entertainment (NYSE: GET). Gaylord owns destination hotels that cater to business travelers, as well as radio and TV shows, and Nashville's venerable Grand Ole Opry. Gaylord will put ResortQuest's name in every room of every hotel it owns, increasing the exposure of ResortQuest's properties to its eight-million-plus visitors. As soon as the merger was announced, ResortQuest's stock jumped.
Great news for Starr, but what he enjoys most is the challenge. For as long as Starr can remember, he has been ferreting out business opportunities. Yes, he says, he's driven, but "it's not about success and money. I'd rather not talk about those things. I don't know what it is."
Growing up in Vermont, he was a straight-A student with a perfect attendance record. Even then he woke up before daybreak to blow snow off driveways and mow lawns in the summer. "I've always liked to work," he says. Although a political science major at the University of Vermont, "I knew at a very young age that I would never work for anybody." Starr's father, Charlie, was a marketing executive for major companies across the country. Then he was laid off. "He was approaching his 50s," Starr says. "I was 12 or 13 at the time and it affected me." Starr says his father quickly went into business with his mother Nancy, who had her own marketing research firm, (she eventually started SMR Research in Sarasota) and helped her grow her business, but his father's experience left an impression. "I didn't want to be dependent on anyone else."
In 1983, after college, Starr decided to go into business with his brother. They applied for a Cellular One franchise in Sarasota and Bradenton before most people ever dreamed the cell phone would become as indispensable as indoor plumbing. At the time, cell phones were about the size of a shoe, started at $1,000 and there were no towers to transmit signals. "People had to go the top of the Skyway to make a call," he remembers. Still, Starr and his brother managed to sell 3,000 phones. And because GTE and Cellular One were the only cell phone companies in the area, Starr and his brother flourished.
Then prices dropped and other cellular carriers began to flood the market. They sold in 1988. Starr won't divulge the sale figure, only that "we were in from the beginning and we made money. We did very well."
His brother went on to start American Blinds in Sarasota, but Starr heard about a rental business on Longboat Key called Longboat Accommodations. The owner, who managed 30 vacation properties, wanted to sell. At the time, the population on Longboat Key and in Sarasota was exploding, and Starr figured that many of these people were buying these properties as investments that needed to be managed. Property management companies make their money by managing properties for a fee, usually 20 to 25 percent of the rent. Starr watched every property sale and closing, sent letters to every buyer, visited every insurance agent, title agent and realtor in Sarasota and Manatee. "My goal was not to leave any potential lead unturned."
In a year, he was managing 200 properties; a couple of years later, 500. In 1991 he bought a second property management company on Marco Island and started a travel agency to help vacationers with travel plans and to build customer loyalty; in 1992 he bought a third office in Naples. When it became apparent that travelers were using the Internet, Starr quickly created Web sites and named them for the resort areas he covered: Longboat Key's Web site became Longboatkey.com; his Naples offices became Naples.com. "We had every dot-com," he says. "I'm sure the chambers are still angry." (He's since released some of these domain names.)
Starr's business strategies are not haphazard. He monitors the ratio of incoming calls to the actual reservations booked and has achieved an enviable conversion record. For every phone inquiry his staff receives, they book 18 to 20 percent, much higher than the 10-percent industry average. And he's a believer in advertising-"We spend so much more than anyone else"-a strategy he believes pays off. "The more ads you run, the more your phone rings," he says. "Marketing costs money but it makes money, too. "
Under his ownership, Longboat Accommodations-renamed Florida Vacation Accommodations in 1999 to represent the breadth of his territory-quickly became the largest vacation rental company on the west coast of Florida, an impressive achievement since vacation home and condo rentals is a tricky business. Unlike hotels that have a housekeeping, maintenance and desk staff on site, most vacation rental properties are managed off site, which requires tremendous coordination, especially when they're spread across a few hundred miles of coastline.
The vacation rental business must also satisfy two masters: the guest and the property owner. Owners want results when they contract with a manager, meaning they want regular rental income; and because they also view the property as their own home, they want it kept in immaculate condition. The guest, on the other hand, has myriad day-to-day problems, everything from an air conditioner on the blink to the sighting of a cockroach in the bathtub.
Some real estate companies will manage properties for their buyers, says Starr, but they'd much rather sell a property and move on. Michael Saunders & Company used to have a rental division before selling to Starr in 1999. "That was probably the happiest day of Michael's life," Starr says. "The rental business is the red-headed stepchild. No one wants to deal with dirty coffeepots and sheets. You either set up systems or it becomes a problem. This is all we do, and we have systems in place."
Eventually, Starr's success attracted ResortQuest, a fledgling company, founded in 1998, that was buying property management companies in resort areas across the country. It tried to buy Michael Saunders' rental division, for example. But every time ResortQuest got close to buying a property management company in Starr's territory, Starr was there ahead of them. "We were able to move much more quickly," Starr says.
Ten years ago, vacation property management businesses were not considered attractive investments. "You couldn't give one away," says Al Williams, president of Priscilla Murphy Realty in Sanibel and the former president of ResortQuest Southwest before Starr took over. (Priscilla Murphy Realty was in the original group of property management companies ResortQuest bought in Florida.) But then people started taking another look. While fraught with nitpicky details, the business yields a predictable income. Unlike hotel visitors, vacationers in homes and condos tend to be repeat customers. "If you were making $50,000 last year, you could be reasonably sure you would make about that much the next year," Williams says.
At first, Starr-always the independent, willful entrepreneur-resisted ResortQuest's advances. But ResortQuest persisted, and Starr could see the company was gaining momentum in the vacation condo/home market. "I flew to their corporate headquarters and they explained the company philosophy," he says. Then, he flew back home to talk to his managers-something his managers say is characteristic of him-to make sure they were all behind the buy out. When they said they'd follow his lead, he accepted the offer, comforting himself with the thought that if it didn't work out, he would just do something else for a living. (And although Starr won't discuss the purchase price, others estimate that ResortQuest must have offered top dollar for Starr's choice portfolio of Southwest Florida properties. Starr sold in March 2001, just before 9/11 and the subsequent collapse of the travel industry.)
Starr is paid a salary now and his is the second-largest local operating company that ResortQuest owns in Florida. (The first is in the Panhandle.) Most sellers are voluntarily phased out after the sale, but ResortQuest "came back and negotiated with Larry," says Williams. "Larry had a reputation for being a very good operator. He's very entrepreneurial."
It's the same reputation Starr earned as a longtime board member and past chair of the Sarasota Convention and Visitors Bureau (SCVB). Starr pushed the SCVB into Internet marketing before others even glimpsed its potential, says Gary Smith, president and CEO of Smith Advertising & Associates, which has been the agency for the SCVB since 1989.
ResortQuest, Starr says, has not encroached on his entrepreneurial nature by micromanaging. Its strategy is to let the local operator handle the local market. "They've exceeded my expectations in every way," Starr says. "They brought me another skill set. When you run your own business and you come up short, you work it off in sweat equity. You run the business day to day and hope it goes OK. ResortQuest plans its year; there's a budget process, they forecast. I'd never done that before. I discovered that if you follow a roadmap, it works."
He also likes the deep pockets of ResortQuest and, now, Gaylord Entertainment. To Starr, the vacation rental market can only go up. Americans, he says, are still behind when it comes to renting a home or condo. "Europeans know a lot about this industry. They love the concept. ResortQuest's goal is to inform more people of the option." And with Gaylord now marketing its new acquisition in hotels, ResortQuest is betting that business travelers will choose the condo/home rental over the hotel stay when they vacation with their families.
All this could mean more business for Starr, which suits him just fine. "The busier I am, the more energy I have," he says. "By Sunday, I miss everything. I can't wait to get back to the office."