• News
    • VRM Intel News
    • Latest News
    • Sponsor News
  • COVID-19
  • Marketing
  • Tech
  • OTAs
  • Customer Service
  • Regs
  • Housekeeping
  • More
    • Education
      • Calendar of Events
      • Videos & Whitepapers
    • VRM Intel Live!
    • Reports Login
    • VRM Intel Magazine
    • Subscribe
    • Advertise
    • Authors
    • About Us
    • Contact Us
VRM Intel
  • News
    • Vrbo Is Performing Better Than Airbnb for Vacation Rental Managers, But Direct Booking Still Number One Revenue Source . . . By A Lot
    • 4th Annual #BookDirect Guest Education Day Is February 3, 2021
    • Timing is Everything: The Impact of Seasonality on COVID Recovery for Southeast Destinations
    • Meredith Oskenholt-Meredith Lodging-Bend Oregon
      The Principles That Have Guided Meredith Lodging through the Global Pandemic, Raging Forest Fires and Personal Family Challenges
    • VRM Intel_Christmas-in-New-Orleans
      That’s the Ticket! Register Now to Enjoy Big Savings and Convenient Payment Plans for the 2021 Vacation Rental Women’s Summit in New Orleans
    • VRM Intel News
    • Latest News
    • Sponsor News
  • COVID-19
    • Paycheck-Protection-Program-for-VR-industry
      Latest Round of Paycheck Protection Program Includes Up to $2 Million Loans for Some Vacation Rental Business Owners
    • Timing is Everything: The Impact of Seasonality on COVID Recovery for Southeast Destinations
    • Meredith Oskenholt-Meredith Lodging-Bend Oregon
      The Principles That Have Guided Meredith Lodging through the Global Pandemic, Raging Forest Fires and Personal Family Challenges
    • Airbnb Goes Public. CEO Brian Chesky: “Travel is never going to look like it did in January”
    • Short-Term Rental Industry Giants Grapple with Building Brand Loyalty, Democratization, Regulations, and More at Skift’s 2020 STR Summit
  • Marketing
    • Vrbo Is Performing Better Than Airbnb for Vacation Rental Managers, But Direct Booking Still Number One Revenue Source . . . By A Lot
    • 4th Annual #BookDirect Guest Education Day Is February 3, 2021
    • Timing is Everything: The Impact of Seasonality on COVID Recovery for Southeast Destinations
    • Learn How You Can Unleash Your ‘Limitless Female Energy’ During VRM’s Thought Leadership Series Featuring Author/Speaker Amber Hurdle
    • How to Use Website Traffic to Gauge Demand for Your Market
  • Tech
    • Inhabit IQ Gets “Significant Investment” from Goldman Sachs Merchant Banking Division
    • 2021 Social Media Game Changer
      Are You Ready to Ride the Wave to Becoming a 2021 Social Media Game Changer?
    • NDAs & Confidentiality Agreements: What to Include and When to Enforce
    • Selling Your Business? Know Your Tech Stuff!
    • Dynamic Pricing: To Adjust Rates or Not to Adjust Rates
  • OTAs
    • Vrbo Is Performing Better Than Airbnb for Vacation Rental Managers, But Direct Booking Still Number One Revenue Source . . . By A Lot
    • Airbnb Goes Public. CEO Brian Chesky: “Travel is never going to look like it did in January”
    • 6 Takeaways from Vrbo’s 2021 Consumer Travel Trend Report
    • Barron’s: Airbnb Set to Price December 9 and Trade December 10
    • Booking.com Affirms Commitment to Quality with Minimum Cleanliness Score Requirement
  • Customer Service
    • Meredith Oskenholt-Meredith Lodging-Bend Oregon
      The Principles That Have Guided Meredith Lodging through the Global Pandemic, Raging Forest Fires and Personal Family Challenges
    • Dynamic Pricing: To Adjust Rates or Not to Adjust Rates
    • Repurposing Space: Broadening Your Vacation Rental’s Appeal
    • Booking.com Affirms Commitment to Quality with Minimum Cleanliness Score Requirement
    • New Customers Bring New Demands: Evolving to Meet the Needs of New Customer Avatars
  • Regs
    • Barron’s: Airbnb Set to Price December 9 and Trade December 10
    • Strategic Forecasting Beyond 2021: Are Vacation Rental Managers Changing Fast Enough?
    • Alabama’s tourism economy benefits from Florida Governor DeSantis’ shutdown of vacation rentals
    • Airbnb reaches out to city officials to influence “transitional travel reopening plans”
    • Jeff Paglialonga on FL Vacation Rental COVID-related ban: “We need your support to rectify what I believe is to be the illegal taking of property from Florida vacation rental owners.”
  • Housekeeping
    • Booking.com Affirms Commitment to Quality with Minimum Cleanliness Score Requirement
    • Q&A with Breezeway founder Jeremy Gall about company’s $8 million funding round and more
    • Gatlinburg-based Cabins For YOU acquires Chalet Village and is looking for more. Q&A with owner and founder Greg Plimpton
    • What is the cost of Airbnb’s recommended 24- to 72-hour “buffer” time between stays?
    • The Professional Vacation Rental Manager’s Crisis Playbook
  • More
    • Education
      • Calendar of Events
      • Videos & Whitepapers
    • VRM Intel Live!
    • Reports Login
    • VRM Intel Magazine
    • Subscribe
    • Advertise
    • Authors
    • About Us
    • Contact Us
  • RSS

Latest News

Managers And Owners Angry At HomeAway’s Changes, But Is It Fair?

Managers And Owners Angry At HomeAway’s Changes, But Is It Fair?
mm
Amy Hinote
September 5, 2017

Vacation rental managers and homeowners in traditional vacation markets are up in arms about the many changes at HomeAway since Expedia’s purchase of the company in late 2015.

VRM Intel receives daily complaints from vacation rental managers and homeowners about HomeAway’s latest changes and actions, which are largely related to its decisions to: charge additional fees to guests, require online booking, mask customer data to eliminate direct communications between managers/owners and shoppers, remove all manager/owner information from listings to reduce “leakage,” and threaten to remove listings for perceived infractions of the new policies.

However, several HomeAway representatives believe the angst among vacation rental managers and owners is unfair, especially when compared to Airbnb.

After all, Airbnb also charges guests added fees, and it requires online booking. Airbnb also masks customer data and often removes listings for any perceived violations. In fact, all of HomeAway’s actions mirror those of their number one competitor, Airbnb.

And there is more to come. Airbnb employs pricing suggestion tools and automation (widely reported to push down pricing), and it standardizes contracts and cancelation policies, initiatives that Expedia-owned HomeAway is expected to launch over the coming weeks and months.

So why is HomeAway the recipient of so much passionate criticism while Airbnb skates by?

The answer is both simple and complex.

The simple answer is that, first, in traditional vacation markets (which include beach, lake, mountain, and Disney-oriented destinations), suppliers do not receive enough of their revenue from Airbnb to warrant such a response. Second, Airbnb didn’t change their policies. From the time that Airbnb began attracting suppliers in traditional vacation rental markets, their policies have remained consistent.

(We recognize that vacation rental managers and homeowners do not like to be referred to as “suppliers.” However, the OTAs consider managers and homeowners to be suppliers of the inventory that is available in their marketplaces, so forgive us for using the term going forward in the article.)

The more complex reason that HomeAway is being bombarded with upset suppliers is that its suppliers previously had a “relationship” with HomeAway. These owners and managers feel that they entered into—what they considered to be—a partnership with HomeAway (more specifically, HomeAway-owned VRBO.com). They paid a subscription fee to HomeAway and gave the company their inventory for the mutual benefit of increasing awareness and providing a two-way marketplace for vacation rentals. As a result, in what they thought was a trusting partnership with a company that valued their needs, suppliers obtained more bookings, HomeAway flourished, and vacation rentals as a lodging alternative became mainstream.

When Expedia purchased HomeAway, the game changed.

Suppliers felt duped.

 

History Lesson: VRBO.com was founded in 1996. VRBO.com was purchased by HomeAway in 2006. Expedia purchased HomeAway in 2015.

Expedia turned HomeAway’s listing sites into eCommerce platforms and fundamentally changed the way vacation rental managers and homeowners conduct business.

To take a deeper look, HomeAway’s supplier base can be divided into four distinct segments which have differing, yet equally infuriated, responses to the recent changes.

 

4 HomeAway Supplier Segments

 

1. Vacation Rental Homeowners

VRBO.com was a major vacation rental industry disruptor, as it provided homeowners—for the first time—the opportunity to promote and book their vacation rental homes to the mass market without the use of a property manager. In turn, the supply these homeowners gave the marketplace allowed VRBO.com to thrive. The partnership was a good one for both VRBO.com and homeowners. Consequently, homeowners placed all of their “eggs in one basket” with VRBO.com and utilized the site as their primary source of revenue. Through the VRBO.com marketplace, homeowners communicated with guests, screened out potentially disruptive parties, and set realistic expectations.

With the recent changes to policies, homeowners are no longer able to conduct personalized pre-stay communications and negotiations. In addition, the new “service” fees charged to guests have significantly increased the cost of bookings, have resulted in friction between the traveler and the owner and in many cases a substantial decline in bookings.

 

2. Vacation Rental Management Companies Founded Pre-2002

For vacation rental management companies founded before 2002, the disruption created by VRBO.com was significant. All of a sudden, homeowners had an outlet to market their own properties to consumers. These vacation rental managers found themselves competing, not only for inventory, but for guest awareness against HomeAway’s huge online marketing budget. This created a new segment of competition for professional property managers, a market-wide loss of inventory, and a push-down in market pricing.

In 2010, HomeAway purchased Instant Software, the largest software provider for these traditional vacation rental managers, which further entangled property managers with HomeAway and created a new layer of dependency on the company. After the software purchase by HomeAway, the company promised a “wall” between the software division and the distribution sites. In recent months, however, after Expedia’s purchase of HomeAway, that “wall” has come down, and property managers are just now beginning to experience the ramifications of Expedia’s use of their data.

 

3. Vacation Rental Management Companies Founded Post-2002

After 2002, a new group of vacation rental managers emerged. These managers began as homeowners, found marketing success booking through HomeAway/VRBO, and were able to build successful property management businesses by optimizing the marketplace and providing more personalized property care.

These companies literally grew up with HomeAway/VRBO and are especially reliant on their performance. For these companies, pulling their supply off of HomeAway is simply not an option, as it is their primary source of bookings.

 

4. The New Multi-Destination Vacation Rental Manager

As a result of the booking success of HomeAway, new multi-destination property management companies (i.e. Vacasa, Turnkey, etc.) have emerged with an above-average dependency on HomeAway as a primary booking channel. These companies have been able to flourish by leveraging HomeAway’s audience and have been more than willing to adapt to the company’s changes as they do not incur the additional marketing costs of using traditional or local marketing channels. However, these new companies are more susceptible to HomeAway’s changes than any other group. These companies are largely funded by outside investment, which gives them a short-term advantage in weathering changes. Yet with a decline in reservations generated by HomeAway, these new multi-destination companies face the immediate challenge of either finding new ways to get more bookings from HomeAway or attempting to replace these bookings through additonal channels.

 

Is the Supplier Push-back Against HomeAway Fair?

While it is true that Airbnb’s policies are no different, the resistance to HomeAway’s changes are felt much more closely to the wallet.

Airbnb dominates the shared-housing market and the short-term rental market in urban markets, but HomeAway accounts for the largest share of non-direct bookings in every traditional US vacation rental market. Any changes to the HomeAway model are felt immediately by their suppliers in these destinations.

In addition, many of HomeAway’s suppliers were able to build their property management companies and rental income based on their perceived “partnership” with the company. The reported decline in bookings generated by HomeAway decreases their ability to operate their businesses or—for homeowners—pay the mortgage on their vacation home.

 

But This Is How Hotels Work With OTAs. Or Is It?

When discussing OTAs and the vacation rental industry, experts often compare the hotel industry’s experience with OTAs. However, the comparison is far from apples-to-apples.

Here are some ways that hotels are better able to work with OTAs

  1. Hotel brands are prominently displayed on OTAs, while HomeAway has removed any mention of a vacation rental brand.
  2. Hotels have independent market data to keep OTAs from dictating pricing. HomeAway’s upcoming pricing tool and “Offer Strength” sort metric cannot be combatted without independent market data.
  3. Hotels have the ability to offer guests 24-48 hour cancellation windows. According to Jon Gray, ex-chief revenue officer for HomeAway, “The booking window for vacation rentals is typically ninety days.” In vacation rental markets where bookings are made an average of ninety days in advance, rebooking a vacant period caused by a cancellation made 24 to 48 hours before the guest’s check-in day is nearly impossible without offering potential guests heavy discounts and paying the high marketing cost of advertising that discount.
  4. Hotels do not have a need to communicate directly with guests. From the guest’s perspective, vacation rental shoppers often are looking for accommodations for up to 20 people in a party, have special needs, and need detailed questions answered. From the supplier’s perspective, accommodating for a large number of guests and setting the right expectations require direct communication with guests. It would be similar to hotels allowing instant online booking for meetings, weddings, and groups.

 

Will Suppliers Be Able to Sway HomeAway?

Expedia is accustomed to being disliked by its lodging suppliers and is not phased by the multitude of articles, blogs, forums, AHLA actions, and anti-OTA initiatives. The only strategy that will be efffective in swaying behavior at Expedia-owned HomeAway is for suppliers to remove inventory, and most of the supplier segments outlined above simply cannot afford to remove their supply from HomeAway’s sites. Expedia believes that, like hotels, vacation rental suppliers need them.

Yet a surprising fact is that, unlike hotels, in most traditional US vacation rental markets HomeAway only lists less than than 60 percent of the available inventory; and in many markets, HomeAway represents less that 40 percent of the vacation rental inventory. There is a slight possibility that vacation rental suppliers might come to the realization that OTAs need their inventory more than they need them.

Related ItemsairbnbbookingsFeaturedhomeawayhotelsinventoryotarentalsreservationsshort-term rentalssupplytraditional. marketsvacation
View Comments (66)

66 Comments

  1. Pingback: VRS199 – Can Vacation Rental Owners Regain Control with Amy Hinote of VRM Intel | Cottage blogger

  2. Pingback: Managers And Owners Angry At HomeAway’s Changes, But Is It Fair? – Holiday Rental Weekly

Leave a Reply

Cancel reply

Your email address will not be published. Required fields are marked *

Latest News
September 5, 2017
mm
Amy Hinote @vrmintel

Amy Hinote is the founder and editor-in-chief of VRM Intel Magazine, which provides news, information and resources for the professionally managed vacation rental industry. With a background in finance and over 15 years in the vacation rental industry, Hinote has worked with property management companies, technology companies, intermediaries and investors, and provides insider information about the growing vacation rental industry. She also founded the data company, now known as Key Data Dashboard, which provides aggregated market intelligence and reporting for vacation rental managers. Hinote resides between Alabama's Gulf Coast and Evanston, Illinois.

Related ItemsairbnbbookingsFeaturedhomeawayhotelsinventoryotarentalsreservationsshort-term rentalssupplytraditional. marketsvacation

More in Latest News

Vrbo Is Performing Better Than Airbnb for Vacation Rental Managers, But Direct Booking Still Number One Revenue Source . . . By A Lot

Amy HinoteJanuary 24, 2021
Read More

4th Annual #BookDirect Guest Education Day Is February 3, 2021

Amy HinoteJanuary 24, 2021
Read More

Inhabit IQ Gets “Significant Investment” from Goldman Sachs Merchant Banking Division

Amy HinoteDecember 18, 2020
Read More

Airbnb Goes Public. CEO Brian Chesky: “Travel is never going to look like it did in January”

Amy HinoteDecember 10, 2020
Read More

Short-Term Rental Industry Giants Grapple with Building Brand Loyalty, Democratization, Regulations, and More at Skift’s 2020 STR Summit

Zandra WolfgramDecember 9, 2020
Read More
All Star and SoCal Vacation Homes

The Bright Spot in 2020 Travel: U.S. Vacation Rentals See Higher ADRs, Revenue, and Adj. Pd. Occupancy

Amy HinoteDecember 8, 2020
Read More
Scroll for more
Tap

Sponsor News

  • Inhabit IQ Gets “Significant Investment” from Goldman Sachs Merchant Banking Division
    Latest NewsDecember 18, 2020
  • You Are Your Best Revenue Manager
    Revenue ManagementNovember 30, 2020
  • How Email Helped Save Vacation Rental Companies During the COVID-19 Pandemic
    AdvertisementNovember 21, 2020
  • Booking.com Affirms Commitment to Quality with Minimum Cleanliness Score Requirement
    Customer Service for Vacation Rental ProfessionalsNovember 18, 2020
VRM Intel
Calendar of Events
Videos & Whitepapers
VRMintel Magazine
Subscribe
Advertise
About Us
Authors
Contact Us

Recent News

  • Vrbo Is Performing Better Than Airbnb for Vacation Rental Managers, But Direct Booking Still Number One Revenue Source . . . By A Lot
    BusinessJanuary 24, 2021
  • 4th Annual #BookDirect Guest Education Day Is February 3, 2021
    EducationJanuary 24, 2021
  • Paycheck-Protection-Program-for-VR-industry
    Latest Round of Paycheck Protection Program Includes Up to $2 Million Loans for Some Vacation Rental Business Owners
    BlogJanuary 20, 2021
  • Timing is Everything: The Impact of Seasonality on COVID Recovery for Southeast Destinations
    BlogJanuary 18, 2021

View Current Issue

VRMintel Copyright © 2016-17 | Click HERE to Subscribe | Privacy Policy | Disclaimer | Copyright | Jobs | Facebook | Twitter | LinkedIn

Meredith Lodging Acquires Oregon Shores Vacation Rentals
$3M Lawsuit Against Vacasa Serves as a Warning for All Vacation Rental Managers
We use cookies and similar technologies to recognize repeat visits, as well as to measure the effectiveness of campaigns and analyze traffic. By clicking "I Accept" you consent to the use of cookies unless you have disabled them.Accept