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Adam Norko, founder of VR Growth and a veteran of the short-term rental space with over 15 years of experience, believes we're witnessing a fundamental shift in the vacation rental industry. Just as economists describe a "k-shaped economic recovery" where some segments thrive while others decline, Adam sees the STR market splitting into two distinct paths: professional operators who master the fundamentals of hospitality, marketing, and operations, and those who remain dependent on OTAs without ever reaching true business maturity.
In this conversation, Adam shares his journey from Marine Corps leadership to real estate investing and STR tech, offering hard-won insights on what it really takes to build a sustainable, profitable property management business in today's challenging environment.
Adam's path into vacation rentals wasn't planned. Rather, it was the result of persistence and timing. After leaving the Marine Corps and flipping homes in Charlotte, North Carolina, he decided he wanted to live somewhere with waves where he could surf. "I put out resumes to over 300 companies at any sort of beach that had waves where I could surf," Adam recalls. That determination landed him a director of marketing role at Seaside Vacations in the Outer Banks in 2008.
The timing couldn't have been more perfect: Adam arrived just as the industry was undergoing its first major transformation: the shift from print to digital. "Everybody back at that point still had magazines that they would send out to all of the past guests on an annual basis," he explains. "That's really how the majority of reservations happened."
Within a year, Adam helped transform the company's marketing from 90% print to 90% online. As a result, despite managing only 250 homes, they were outperforming competitors with over 1,000 properties. The lesson? Being early to recognize industry shifts creates competitive advantage.
Looking back over 15 years, Adam identifies several pivotal moments that reshaped the industry:
Adam's most provocative observation is that the vacation rental industry is splitting into two distinct segments, much like the broader economy. "We're going to have companies at the top that are successful, that understand the value of marketing and direct marketing, valuable content, guest experience, hospitality, and tight operations, and really honing in on the financial side of it," he explains.
On the other end? "We're going to have a bottom part of the industry that is really focused on OTAs, and they never really got to sort of that professional level of trying to grow and scale the way that a true business would."
"Professional" doesn't refer to the size of a business, but mindset. Adam has seen the industry from multiple perspectives: working inside larger organizations, operating in the tech vendor space, and managing properties with his wife through Airbnb. That experience has led him to the conclusion that professional operators of any size can succeed by focusing on quality over quantity.
One encouraging trend Adam has noticed is that property managers are talking about revenue and profit instead of just property counts. "I'm very happy to hear that trend," he says. "I think we need to get back to the focus on profit, not just revenue."
He's particularly critical of managers who tout their "topline revenue of how much a company is generating through reservations, especially when they're going to give away 80% of that to the homeowners."
Profit, on the other hand, is the key metric: "I think profit is going to be exceptionally important as we go forward. This industry doesn't make sense if operators aren't profitable, if homeowners aren't profitable, and ultimately if the guests aren't getting a good deal on that."
The shift toward profitability is forcing managers to make harder choices about their portfolios. Adam describes meeting operators who have decreased their listing counts while growing revenue and profit by focusing on properties that deliver exceptional experiences and strong margins. This echoes an experience shared by Jeremy Werden, co-founder of BNBCalc, during his appearance on the Minute by Minut podcast.
One of the most pressing challenges facing property managers today is tech stack complexity. During the boom years, when money was flowing freely and growth seemed unlimited, many operators accumulated layers of technology without carefully considering integration, adoption, or redundancy.
"I think there is a real need to simplify and understand that this is a tech stack that is simple, that we can use, that our team will adopt, that our guests will adopt, that our homeowners will adopt," Adam argues. "I think there's a lot of value in that simplification."
But simplification isn't easy: "I think that the proliferation of the technology has been really difficult in the industry because it confuses the market. You've got either people that maybe oversell functionality or don't fully understand it, or when you look at the demo it's not entirely what it's going to be like when you actually start to use it. So as a result, I think that you've got bloated tech stacks that have grown because the money was there and the tech was there."
So what does a property manager actually need? Adam outlines the core components:
The critical factor isn't just having these tools, but how well they integrate. "In order for the industry to truly evolve and to truly leverage the technology that's out there, I think we've got to have much stronger integrations between the tools," Adam emphasizes.
Poor integration between systems has been an ongoing struggle. Some PMS providers treat integrations as revenue opportunities, creating gatekeepers that slow innovation. Others embrace open marketplaces but struggle with execution.
Adam believes the power dynamic is shifting: "I think that the property managers will probably continue to get some more control, and it could be that AI is going to give property managers more ability to build some of this stuff in house."
Vendors with open mindsets and strong integration capabilities will gain market share. Those that don't will find themselves increasingly irrelevant as operators demand systems that work together seamlessly.
Perhaps Adam's most urgent message for property managers is about marketing. During the post-COVID boom, many operators became complacent. "Guest bookings were coming in really easily. So as a result, we didn't focus on marketing and driving direct bookings and having a really strong guest experience because we didn't need to."
Now, supply has increased and demand has normalized, but jumping from OTA dependence to direct marketing feels like crossing a chasm.
"With OTAs, you pay them, but you know that you got the reservation," Adam explains. "With direct marketing, you've got to go out and spend it and do the work before you're going to get it."
The bridge across that chasm? Building relationships that generate repeat guests. "One of the best ways to do that is by increasing your repeat guest," Adam says. "If you offer this great service and the guests come back, that takes a huge weight off of your business' shoulders because now you're not working as hard to get those guests."
The economics are compelling: it's always less expensive to retain existing guests than acquire new ones. But it requires exceptional service.
"At the end of the day, this industry, hospitality service, is a service industry," Adam reminds us. "Yes, we have a product. Yes, we have a home. But the reality is that businesses grow and the homes are successful and the guests come back because of the service that they get when they're there."
Looking forward, Adam sees content marketing as increasingly critical. "Great content is what's going to continue to move the industry because that's what Google is looking for. That's what AI is looking for. They're looking for the authority in the industry based on whatever the question or the keyword is."
As AI-powered search becomes more prevalent, establishing thought leadership and authority through valuable content will separate winners from losers. Property managers who invest in creating genuinely helpful content, rather than just promotional material, will be rewarded with visibility and trust.
The vacation rental industry has long assumed that bigger is better. But Adam challenges this assumption, particularly in the current environment. "I think quality over quantity in a lot of different ways in the industry is where we should put our focus, and I do think that that's happening."
Small operators, even those managing just a handful of properties, can compete effectively if they adopt a professional mindset. "I think that there's huge opportunity for quality managers to really focus on a smaller quantity of properties and really a quality of the property, a quality of the guest experience, a quality of the operations that they have."
The key word is "professional." It's mindset, not size, that determines professionalism. A host managing five properties with exceptional attention to guest experience, homeowner relationships, and operational excellence can build a more sustainable, profitable business than a manager racing to 500 properties without solid fundamentals.
Interestingly, Adam sees the 10-50 property segment as particularly promising. This middle market has historically been underserved by technology vendors, who focused either on the long tail of individual hosts or the enterprise segment of large managers.
"Smaller could mean a lot to different people, but I'd say 10, 20 units, that's where a lot of the industry is going to gravitate towards," Adam predicts. "And there's not going to be a sacrifice in quality down there. The same guest experiences are going to be needed there."
This segment often delivers the best guest satisfaction scores, as they're not too small to lack professionalism, but not so large that they lose the personal touch. As AI and new marketing approaches make it more cost-effective to reach and serve this segment, expect to see more innovation targeted at these operators.
One of Adam's most striking observations is about the amount of capital that has flowed into, and out of, the vacation rental industry. "I'm still amazed at the amount of money, funding, private equity that has come into this industry that has been burned up without really an understanding of what went wrong, or why things failed."
The pattern repeats: sophisticated investors with deep pockets assume vacation rental management is straightforward. They discover too late that it's actually an operationally complex, relationship-intensive business with thin margins and countless moving parts.
"I continue to be astounded by the amount of strong money and really smart people that think that this industry is easy, and then they get into it and realize how really difficult it is," Adam says.
Adam doesn't see this getting easier. In fact, he believes the next wave of capital entering the industry will face even greater challenges. "Generating that profit in this industry during challenging times like this, I think, is going to be that much more difficult."
With the easy growth over, the operators who thrive will be those who master the fundamentals: exceptional guest service, strong homeowner relationships, efficient operations, smart marketing, and disciplined financial management.
Adam's message is both sobering and empowering: the path forward requires getting back to basics while embracing the right technology. It means choosing profitability over vanity metrics, service over scale, and quality over quantity.
The operators who succeed in this k-shaped period will be those who recognize that vacation rental management isn't just about filling calendars, but about building relationships, delivering experiences, and running a real business with discipline and professionalism. Whether you manage five properties or 500, those fundamentals remain the same.
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