Category Archives: News

Expedia’s Purchase of Orbitz Approved – What This Means for Vacation Rentals

Photo by Alexas_Fotos
Photo by Alexas_Fotos

Many have seen this coming, and the writing has been on the wall for quite a while now. With hotels firmly in place, it’s just a matter of time before one of these companies (Expedia or Priceline) dominates the vacation rental market.

I think this is likely to play out one of a few ways;

  • One of these companies buys AirBnb. My money is on Priceline given recent comments by their CEO. AirBnb is a cash cow and they are better suited to the hotel model. (Mostly RBO and willing to rent for a single night.)
  • Expedia doubles down on TripAdvisor (they essentially own it) and tries to crack the vacation rental nut. They definitely have the cash, though they have had plenty of time to do it without any significant results. TripAdvisor seems to be focusing more on hotels, and will likely decide that’s where the money is for now. Particularly given their less than stellar recent financial results, they will likely decide they can’t risk putting too many eggs in the vacation rental basket.
  • One of the companies make a strategic investment in HomeAway. I doubt an acquisition is on the horizon, though it could happen. My money is on Priceline given that Expedia already owns TripAdvisor and as mentioned above, Priceline is chomping at the bit to get into vacation rentals. (It’s also possible that HomeAway becomes a viable contender to Expedia and Priceline, but I think that’s unlikely at this point.)

Of the three, my money is on the first scenario, though I would not be surprised to see the third one happen.

What this means is that more and more bookings are going to be made through OTAs and the standard is going to be the “Book It Now” model. (I predict that by 2020 the majority of listings will be this way.)

What does this mean for vacation rental managers?

  • Diversify revenue streams – the majority of revenue for vr managers has historically come from rent. With OTAs and listing sites taking anywhere from 10%-30%, other revenue streams will become critical. This will include everything from additional charges to concierge services and damage waivers. (Companies like Discover Sunriver are doing some really innovative stuff with their loyalty programs. Check it out here.)
  • Yield Management – this is already an important part of revenue management, and it will become more and more critical as time goes on. The days of having two pricing structures (high season and low season) are almost gone. If you aren’t capitalizing on the nuances of supply and demand then you are falling farther and farther behind. (Read more on Yield Management strategies here.)
  • Direct marketing – Use the OTA’s and marketing sites to get new customers through the front door, then use direct marketing to past guests to keep them company back. This is going to become critical for survival. (Read here and here for more idea on this.)
  • Automate, automate, automate – Streamlined processes are going to be key to reducing costs. This doesn’t mean sacrificing that personal touch that differentiates vacation rentals from hotels. This means automating processes like check-in/out, keyless entry, auto-correspondence and credit card processing, etc. It won’t be cost effective to employ someone to manually send out guest correspondence and process credit cards for example.

The good news is that this is still just the beginning of the transition, so there is plenty of time to start making changes and gradually transition. You can start now upgrading units to keyless entry and remote climate control. Start now building a loyalty program and direct marketing campaigns. Explore new ways of driving revenue through additional services, referrals, and programs.

Vacation Rental & Travel News & Trends – May 15th 2015

Travel & Tech News
Travel & Tech News

Amazon is getting into the travel business. Right now it’s limited to the same type of offerings that Groupon and Living Social offer, but could a day be coming where you can book flights, lodging, activities, and rent a car all on Amazon? You can get everything else there, why not a vacation package?

One of the ways you can help your guests have a great vacation, and also stay top of mind with them, is to send them tips like these prior to their stay, and in your monthly/quarterly newsletter to them. Part of your brand should be that you’re looking out for your guests to ensure that they have a fantastic stay. (If you are not currently marketing to your past guests, contact me via the Contact tab and I can help you put a plan in place.)

Concierge via txt messaging is already here. This is something that I think will be commonplace in the next 5 years or so. The cool thing about this app is that it starts the guest experience 72 hours before they arrive. If they need fresh towels, they can just touch the “Towels” button and it will send a txt to the housekeeping staff to replace towels for their room.

You can already start doing this for your guests, and you don’t need a fancy app to do it. Buy a smartphone that guests can text day or night if they have a request or issue, and pass it around to different staff members each week to be the one “on call”. Give them $50 for each week they are on call as an added incentive. Your guests will love you for it.

Here’s an interesting article from Tripping.com about the amenities in your homes that add the most value. These are the amenities that should be front and center in your unit descriptions, pictures, and marketing material.

Until next week…

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Travel & Tech News You Can’t Miss – May 8th 2015

Travel & Tech News
Travel & Tech News

Disappointing news this week about vacation rentals’ performance on Expedia. Here’s the kicker to the whole story, “I think vacation rentals are an important market,” Expedia Inc. CEO Dara Khosrowshahi told financial analysts during the company’s first quarter of 2015 earnings call last week. “It’s an important product in many, many markets. As to whether it’s important for Expedia to be in, that remains to be determined.

Some of this is just growing pains for our industry, and some of this is failure to find that middle ground that will allow the square peg to fit into the round hole. Expedia wants quite a bit of control over the inventory, pricing and payments for vacation rentals (like they have with hotels) and many vacation rental companies can’t give up that much control. Particularly with a 15%-20% commission attached.

Everyone involved has their work cut out for them. Ultimately it has to be easy for the guests to book, lucrative enough for Expedia to make the right investment, and allow the vacation rentals companies (or owners) to continue to provide the personal touch that makes vacation rentals unique.

Did you survive “Mobilegeddon“? If your website isn’t mobile friendly, then you likely suffered in your Google search rankings as of April 21st.

Even if you still get the majority of your bookings over the phone or e-mail, 20% of searches are done on a mobile device, and it was recently reported that 25% of all digital transactions in the US were generated from a mobile device.

Speaking of mobile transactions, I have often said that virtual wallets and online currency are going to become the norm in the not too distant future. So it was interesting to read that Google Wallet funds are now FDIC insured.

There is still a ways to go before this becomes mainstream, but the writing is on the wall. Here’s something to think about; will your business be ready when this becomes the preferred method of payment?

The airlines are trying to be the first to integrate mobile payments into their guest experience. Here’s an article on how a few of them are making this happen. JetBlue will let you make in-flight purchases through their app on your iOS device ,and KLM is experimenting with booking flights on Facebook and Twitter.

Lots of change coming. Are you ready for it?

Until next week…

(PS – Sign up for the Newsletter in the sidebar and these News segments will be delivered to your inbox. You won’t get spammed with junk and sales pitches. Promise!)

Travel & Tech News – Social Media, Mobile, and More

Travel & Tech News
Travel & Tech News

Do you use social media to market your rentals and interact with prospects and guests? Here is a great article on how to make Twitter work for you.  “65% of leisure travelers start researching online before they’ve decided where or how to travel.” This is a huge opportunity for engagement.

Ever wonder if your audience is seeing the tweets, posts, and articles that you put out through your socials media accounts? This article tells you the best times to post to social media.

While aimed at hotels, this article provides a great lesson in online engagement that can be applied to vacation rentals. “Hotels that responded to more than 50% of social reviews grew occupancy rates by 6.4%, more than twice the rate of properties that largely ignored social media reviews.” The same goes for your Guest Reviews. A company that responds to its customers (whether it be a complaint or praise) communicates that it’s paying attention and that it cares.

Are you ready for the “mobile mind shift“? Mobile commerce is forecasted to hit $75 billion by 2018. Here’s the kicker, “… no matter where they are or what device they are using, they expect a personalized, fast, rich and no-hassle online experience.”

Do you need a mobile app to stay competitive in this new mobile-centric world? Research from Phocuswright suggests that you don’t. Airline apps are by far the most widely used at 42%, follow by OTAs at 13%, a pretty steep drop off. The research finds that mobile friendly websites are where most travelers to look for places to stay and things to do, however.

And finally, just for the fun of it, if you are ever in Rome you can go to Roman Gladiator school, for about $140. I’m totally doing this if I ever get to Rome.

Until next week!

Travel & Tech News – Services, Instant Messaging, and Canada

Travel & Lodging News & Information
News & Information

Amazon is getting into the “handy man” and demand services business, with “Amazon Home Services”. This could be a useful resource for vacation rental companies that need work done on their units and don’t have a regular plumber, electrician, handy man, etc. Or just want to shop around for the best price.

Here’s another new idea that Amazon is trying out; “Dash” buttons. (Press the button and it automatically orders you a new batch of the item it is associated with. Paper towels, detergent, etc.) Imagine a day when your guests don’t have to call you for something they need, but can just press a button and have it delivered.It’s hard to say whether this will actually take off or become a novelty relegated to “Remember When?” type articles and shows. Regardless, it is more evidence that services on demand via wireless technology are becoming the norm and will soon be expected, rather than just a luxury.

In the not too distant future, you may communicate with your guests predominantly through an instant messaging service. Hotels are already trying to figure out what this looks like, and services like Facebook’s Business Messenger could make it really easy and affordable.  This line from the article sums the idea up nicely, “…messaging is a platform for customer-centricity, which is among the biggest opportunities we have.

HomeAway makes an expansion into the Canadian market by investing in CanadaStays. According to the article, destinations in places like Montreal and British Columbia saw demand grow by double digits last year. This is potentially a very good thing for all involved as it adds popular inventory to the HomeAway Network for travelers, but could also get other North American properties in front of Canadian travelers. My guess is that it will be offered as a part of the bundling packages that HomeAway provides.

Travel & Lodging News from Around the Web – The Economy and Mobile Payments

News & Information
News & Information

The US dollar has hit an eleven year high, with forecasts and data saying that the economy is coming back in full force. This is great news for the travel industry as Airlines for America (an advocacy group that boasts such members as Alaska, Delta, and Southwest Airlines, along with UPS, Fedex, and many more) reports that Spring 2015 air travel is the highest its been in 7 years. This is great news for vacation rental companies, and a perfect reason to reach out to past guests about why they should include you in their Spring and Summer travel plans.

Speaking of the dollar and airlines, UATP (a payment network for airlines) announced that it will begin offering its members the ability to accept Bitcoin as payment for flights.  (Bitcoin is a digital currency that is more secure and efficient than credit cards and other forms of online payment.)

Facebook also threw its hat in the ring saying that it will soon allow its users to send money to each other over the Facebook instant messaging app. Imagine if Facebook becomes a viable booking channel for vacation rentals with the ability for the guest to pay for their stay, write reviews, upload pictures, and share it all with their friends. Which vacation rental software company will be the first to integrate with Facebook?

And speaking of mobile payments, airlines, travel companies, and some hotels are already starting to gear offerings and integration with the Apple Watch. The Apple Watch uses Apple Pay which is already accepted by many banks and stores as a method of payment. (As of March 3rd there are over 100 banks, credit unions, and credit/debit cards partnered with Apple for Apple Pay. Including Visa, Wells Fargo, Bank of America, and Chase.)

Why is this relevant to vacation rentals? Without knowing how it will all shake out, I feel pretty confident in predicting that in 5 years, 10 at the absolute outside, a significant portion of customers will expect to be able to pay for their travel and lodging via mobile devices, using some form of digital currency like Apple Pay or Bitcoin.

Think I’m dreaming? Consider this; the first generation iPhone was released on June 29, 2007, almost eight years ago. In that eight years, smartphones have completely revolutionized our day to day lives. How we communicate, how we interact with the world, how we get our news, find places to eat, and even read books. (I have a Kindle app on my iPhone so that I can read a book anywhere I find myself with time to kill.) Both the Dept of Justice and former chairman of the Federal Reserve Ben Bernanke have commented on the legitimacy, increased security and efficiency of digital currencies like Bitcoin. Time will ultimately tell, but mobile devices, mobile payments, and digital currency aren’t going away. They will become more and more integrated into our lives, and those companies that profit the most will be those that recognize this and use it to provide value and ease to the customers. They don’t have to be the first, just the best.

Until next week.

Travel & Lodging News from Around the Web

News & Information
News & Information

TripAdvisor reports that 59% of U.S. travelers plan to say in a vacation rental this summer. This is great news for vacation rental companies.

This is also interesting to compare to this report that hotel rates are probably going up, and expected to be the highest they’ve been in 20 years. I think this is good news for vacation rental companies. Increased hotel rates will lead some hotel travelers to look at vacation rentals as a more economical option, particularly with more awareness around the category.

Google is throwing it’s hat in the ring for hotel bookings. How far behind are vacation rentals? I thought this quote was particularly interesting, “Compared to other search formats, Google Hotel Ads has delivered a 45% higher conversion rate. It reaches a massive audience and the distribution cost has been good,…” There’s no doubt that Google is the 800 lb. gorilla when it comes to search and traffic. If HomeAway or TripAdvisor could ink a deal for vacation rentals, it could be a huge boost for category awareness. Historically, vacation rentals haven’t done too well on OTA’s like Expedia and Travelocity, so Google may be hesitant to dip their toe in the water too soon. Time will tell.

Here’s an interesting tidbit from Booking.com, “According to Booking.com data, almost half of reservations worldwide are made within 48 hours and are booked on a mobile device.” This data is in regards to hotels, but I think it is applicable for the vr space as well. The trends are definitely heading towards shorter lead times and bookings done more and more on mobile devices.

With all of the recent press that Airbnb has been getting (here and here, for example), it’s interesting to hear that they are the least favorite option for Millennials, despite the fact that almost half of those surveyed say they use the service often or regularly. Here’s why I think this is relevant for the vr space. The Millennial generation is becoming the most coveted in the lodging industry. (Even The New York Times covered this a few years ago.) There are 74 million of them, they have a growing disposable income given that they don’t tend to own homes or have children, and they are big on social media. This means that not only are these folks becoming a predominant force in the market but they’re sharing their opinions and experiences way more often, and to a larger degree, (via social media) than other groups.

Travel & Hospitality News From Around the Web

News & Information
News & Information

I’m a bit of a futurist in that I love to read about new ideas, technology and trends. It’s fun to imagine what it could mean for the future, but it can also provide a competitive advantage if you can be an early adopter of new technology and services. A wise person once told me that “Knowledge is ultimately never wasted.”

Here’s a grab bag of links from around the web that specifically relate to the travel and hospitality industries that I thought were interesting or though provoking. Enjoy.

Interesting article by Peter Greenberg on new Travel Insurance offerings. Some TI companies will now pay travelers $1,000 if their plane sits on the tarmac for more than 2 hours, or if their luggage is lost or stolen. Crazy that plane delays have become common enough that you now may want to buy insurance for it.

Here’s an interesting (and slightly disturbing) article at the Economist on a mobile travel app that tracks where the traveler is at any given time in order to find them the shortest route to their plane, the nearest lounge if their plane is delayed, and allows stores to ping them with offers tailored to them as they walk by. (Here’s an interesting companion article about smart phone adoption. It predicts that by 2020 80% of the adult population will have smart phones. Apps and mobile technology have gone from an interesting novelty to a mainstay of managing our lives.)

Google Flights will be integrating with RouteHappy, an online service that allows travelers to compare amenities (wifi, leg room, paid or free movies, etc.) across flights and choose the one that best matches their preferences and budget. I played around with it a bit, it’s a neat little tool that I will likely use to book my next flight.

Finally, there are some neat companies mentioned in EyeforTravel’s Start Up Awards finalists list.

  • PalPrices helps travelers book a trip on a budget. It provides a calculator that allows the user dial their expenses up or down across different areas (comfort of travel, size of car, etc.) to stay within their budget. Right now it is limited to a fairly short list of locations, but it has a ton of potential. Something like this integrated into a vacation rental companies website could be a very cool thing, and another way to take in additional revenue.
  • Wellobox is limited to hotels and only one city at the moment (it is a start up after all), but for a fee ($79) a traveler can have a box of goodies delivered to their lodging that will help them explore the area based around a particular lifestyle. (Foodie, Sightseer, Family,  or Adventurer.) The boxes include things like transportation passes, coupons and gift certificates for restaurants and activities, bottles of water, and more. This is something that vacation rental companies could easily start doing on their own, right now.
  • Tripcipe is a browser app that allows the user to save things to eat, see, and do as they browse around the web planning their trip. It eliminates the need for handwritten lists or Excel spreadsheets.
  • Tripstr is a mobile app that allows the traveler to share their travel “story” with pictures, maps, and commentary. I don’t know how unique it is given that many people already share their travels on Facebook, Twitter, and Instagram, but I do like the idea that there is a “story” for every trip that someone takes.