Business: Putting A New Twist On The Traditional Summer Rental

By: Debra Lawless

Topics: Real estate

Del Mar Owner Luke Chapman. COURTESY PHOTO

When Luke Chapman, CEO and founder of Del Mar Vacations, was a teen, he had a summer job cleaning rental houses between renters.

Chapman’s parents, Wes and Susan, were teachers who bought several small cottages in the 1990s to rent out in the summer. Susan Chapman also ran a B&B with three suites in Wellfleet, and Chapman, helping with those guests, observed up-close what it means to be gracious in the hospitality industry.

Life took Chapman away from the Cape — to the University of Massachusetts, Amherst; to the Marine Corps; to Dartmouth College, where he earned an MBA; and to various jobs in the business world. But Chapman, now 40, returned to Orleans with his wife Christine and, in 2015, founded Del Mar Vacations. Del Mar is Spanish for “of the sea,” which Chapman finds appropriate to associate with seaside vacation rentals.

In seven years, Del Mar has grown to over 50 full-time employees. The full-service company operates on a different model from most Cape Cod vacation rental companies. As Chapman put it during a recent telephone interview, “we do all the work and you get a guaranteed paycheck.” He says his model is so popular that several homeowners have said to him, “I never would have rented my house until I found out about you guys.”

Renting out a house generally involves tons of work on the part of the homeowner, and that can translate to tons of stress. In the spring, Del Mar will do the opening cleaning, put out the grill, clean and set out the patio furniture and turn on the outdoor shower. The company provides linens and also “starter supplies” for guests.

“The homeowner has to be involved zero,” Chapman says. The cost of doing all of this is included in the Del Mar fee.

During the rental period things sometimes go wrong, and the homeowner might get a phone call from a typical rental agency. The landscaper didn’t show up. The dryer is broken. The air conditioner has gone off on the hottest night of the year.

“Now you as a homeowner are stepping out of the dental office where you work to make a phone call,” Chapman says. Del Mar avoids this scenario because “we never call a homeowner with a problem. We call with solutions.” The problems aren’t usually created by the renters — they’re found by them. “With Del Mar — yeah, those things arise and we take care of them,” Chapman adds.

Let’s say the dishwasher fails. Chapman has dishwashers on hand, ready to install. If there is a delay, he will send someone over to wash the dishes twice a day. “It’s all about getting a human there to solve a problem,” he says. Del Mar has 15 to 20 trucks, six trailers, and a “pretty robust property management business.” His own staff does the cleanings between renters, scouring 275 houses on a given Saturday. Everyone who works for Del Mar has the Del Mar app on their phones. So if a housekeeper says a toilet is running, Del Mar is able to dispatch a plumber to fix it before the next guests arrive that afternoon.

While Chapman says “concierge” is an overused word these days, he adds that Del Mar “truly is a one-stop shop premium service.” He describes the business as a “hospitality company, first and foremost.” The company’s goal is to give guests five-star vacations.

Del Mar guarantees a homeowner income, and pays it in advance. Chapman estimates what a house can rent for, and he signs an agreement with the homeowner. He arrives at the estimates by looking at his portfolio of homes, and by knowing that certain features — dog friendly, air conditioning, a pool – “drive pricing.” While a typical rental company might charge a flat fee of 15 percent of the rental, Del Mar will probably earn more than that, but what Del Mar takes in has to pay for lawn mowing, trash removal, cleaning. If the company’s expected fee is higher than average, “it’s because we’re taking on so many costs.”

Chapman says Del Mar’s success comes partly because the company is really good at marketing, and can expand the rental season from the standard six-to-eight weeks. In October, for example, the company might have 125 “turnovers,” and this represents “real money.”

The number of Del Mar’s rental properties has grown each year, even during the pandemic. In 2019, the company had 153 rentals, and in 2020 it had 168. Now it is up to nearly 300 rentals that extend from Provincetown to Yarmouth.

A topic that is “near and dear” to Chapman’s heart is what he calls “workforce housing,” or affordable housing. He believes that towns should take a portion of the short-term rental tax and put it toward workforce housing. He says that while people sometimes see the vacation industry as a threat to local housing, that is a “myopic” view, as the vacation industry brings in visitors who spend at local businesses as well as provide the tax dollars.