There was an interesting concept raised on Travolution today. Will companies like Expedia jump on the growth in the vacation rental market and start targeting owners, given the increasing popularity of this type of vacation?
It’s difficult to see how this could work since there are quality issues on both sides to start with. The travel company would have to inspect every property in their inventory which would be a massive undertaking in itself, but how could owners feel confident that the guests who have booked are the right ones for their property? Perhaps those owners who already entrust their rentals to an agency would give this a try, but those who advertise privately – the bulk of the vacation rental suppliers – do so because of the autonomy it gives them to pick and choose their rental guests. Would they be prepared to pass this over to a third party?
There’s changes coming, for sure, and it’s going to be an interesting couple of years as the online travel industry jockeys for position in this growing market. I’ll be keeping a close eye on the industry and reporting on developments. And I hope my readers will let me know when they get the call from Sell off Vacations or Expedia. I’d love to know what they are offering!
{ 8 comments… read them below or add one }
Oh it is already here, many of the homes that are managed by professional companies are already signing up to be linked through the software that they use to manage their reservations. And why not, a vacation home stay is for many people a better value than staying at a hotel. The question as you state is consistency, and that is why most portals would rather work with a property management company as they have a professional company to assist should a complaint occur, while with an individual, the owner is not in a strong place to make a quick adjustment nor is the threat of black balling an individual really enforceable. In addition, the real time portals need the trust of an individual to guarantee real time availability. Also vacation rentals are also on Sabre and Galileo for travel agents to book. I agree that this will be a very interesting few years as this industry is going to mature from a cottage(no pun intended) to a major business in lodging, with many of the hotels and lodging companies seeing this as an alternative model for them to get into.
I appreciate your comments Ed, as they apply to homes managed by professional companies, but the bulk of vacation homes are self managed with a finite amount of reservable time available. Why should an owner take the risk of a third party making occupancy decisions for them, when they do this perfectly well for themselves at relatively low cost?
Their are benefits both ways no doubts. For an owner who lives down the street from their rental property the for rent by owner process is a great model. The farther away the owner lives the more complicated the process gets. I am seeing some property management companies embracing a middle ground where the management company watches out for the property-because the owner is to far away or just does not have the resources, and shares in the rental process. The key is to automate as much of the process as possible so that the management company has less staff overhead in managing the relationship and thus cost. And if an owner is interested in linking to Expedia, they are going to have to pay them a commission, so there is really no big difference between the property management company booking or expedia.
Great to see even more coverage of this on your website, I’ve recently subscribed to your post. The discussion is still going on over at Travolution too.
I think the idea of feeding to Expedia & Co. works really well for certain types of properties. Specifically the ones that are in quite direct competition with hotels. They need to be on a level playing field with hotels in order to compete.
Properties that are more unique (and in my experience tend to by run by the owner, who owns just a few) may do better by building their own brand. They probably won’t do so well on Expedia.
Just my thoughts.
Friends,
I’d like to toss a frosty bucket of cold water on this idea. For the past few years, the Holy Grail for online VR listing companies has been “point, click, book.”
These companies promote that concept as “something that the public wants because it makes booking a vacation rental more like booking a hotel room.”
What they don’t say is that “point, click, book” enables them to take a piece of the rental income.
It is my understanding that HomeAway, the largest listing network, has indicated that it plans to implement some form of online booking eventually. As the world knows, in its latest round of venture capital funding (November,2008) HomeAway raised a breath-taking quarter of a billion dollars. I believe that there is a direct connection between these two points.
In my opinion, as an alleged “expert” in the VR field, “point, click, book” is antithetical to the whole concept of “vacation rentals.”
This approach might work for owners of plain vanilla, cookie-cutter condos. But it will never work for owners of cherished second homes. I’m really not certain that HomeAway and its competitors quite understand this.
I believe that anyone with a truly special property to offer will insist on either screening prospective renters themselves or engaging some trusted property manager to do so on their behalf. Such owners are simply not going to open themselves up to anyone with an Internet connection and a credit card.
Best,
Alfred Glossbrenner, co-author of *How to Make Your Vacation Property Work for You!*
http://www.fullybookedrentals.com
Hi Alfred, I can see where your coming from on this and I *think* I agree with you.
I my experience from our website in Edinburgh, we’ve found that the properties that do best on online booking (which is the whole concept around the way we work) are the groups with multiple properties.
I would definitely not say that they were plain but I think they could more closely related to a hotel suite.
For owners of short term/self catering lets that are effectively letting out a second home, they tend to feel uneasy about online booking. As though they are then letting strangers into their home. These properties (and property owners) are not so suited to online booking.
The ones who are suited to it, are so far doing really quite well.
Cheers – Gareth
Hi, Gareth,
I certainly agree that not every second-home owner is suited to offering their property as a vacation rental/holiday let. And I was interested in what you said about groups with multiple properties being most successful with online booking. I’d imagine that “condotel” companies over here will have similar success with this approach.
I just don’t think that online booking will be accepted by most vacation home owners. And, at the risk of veering off-topic, apparently 55% of vacation home owners in the U.S. do *not* use a property management company. This is according to the much hyped PhoCusWright study due out directly.
Here’s the (ugly) link: http://www.phocuswright.com/research_publications_buy_a_report/546
Best,
Alfred
You hit the nail right on the head. There no human way that Expedia could get representatives out to all of the rental properties available to conduct initial inspections (forget about conducting on-going inspections; that would be impossible times 10!)
Great idea, just impractical execution.
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