Vacation Rental Management in 2016
Every year new technologies and solutions emerge for every industry. Those already entrenched in the industry generally just ignore these newcomers as noise or a quick fads, but the emergence of Airbnb in 2008 followed by its complete domination of the vacation rental industry and mindshare today are a loud reminder that change comes fast whether you respect it or not.
With all that in mind, I find it extremely important to take look at the small (and not so small!) changes that are happening in this industry every year. What changes are happening to the regulation landscape here and abroad? Where are people finding and booking your properties? Which advertising platforms give the best returns for your target market? These are questions that must be answered for you to maintain your rental property, increase revenues and reduce expenses, and ensure you’re targeting the right markets while not throwing your money away online.
Huge Price Increases at HomeAway
The top story of the start of 2016 and the first thing that deserves a mention here is the addition of huge booking fees that were added by HomeAway in February of this year. HomeAway and their other big site VRBO had huge differentiation from Airbnb because they operated on a mostly annual fee-driven model and if the platform was working for you it provided a much better value for money than Airbnb which can take about 15% of each transaction. The management at Expedia and Homeaway decided that since Airbnb was taking such a dominant position in the market all the while taking a significantly highly percentage of booking deals that they needed to make a money grab and jack up their rates too! They enacted a 8–10% “Service Fee” into the customer’s shopping cart taking their new cut right off the top and in turn many owners have already seen a significant reduction in the number of bookings through Homeaway because of this.
This change is going to have what I think will be the biggest impact in the market this year, and signs are already leading that way. Homeaway has become very entrenched in the minds of owners and management companies, and while we all branch out and use multiple sources of bookings, we are going to see even more new competition rise in value.
This huge fee increase is opening the door wide open for smaller listing competitors and especially listing aggregators like www.tripping.com. But what should concern owners the most is the overnight nature of these changes, and will serve as a reminder that you can never trust any listing platform. To survive in the vacation rental market long term and stay on top of changes, you must have your own booking site.
To survive in the vacation rental market long term and stay on top of changes, you must have your own booking site.
When you own your own vacation rental booking site, you’ll always be able to control costs and not be at the whim of the latest corporate takeover. Airbnb won’t be able to kick you off their platform on a whim, and you’ll have everything you need and be prepared to list your site wherever the hot traffic comes from next (and I guarantee it’ll always be changing). I have lots more to write about making your own vacation rental site, but that’s news for a different post.