• 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
    • Meredith Oskenholt-Meredith Lodging-Bend Oregon
      The Enduring 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
    • Inhabit IQ Gets “Significant Investment” from Goldman Sachs Merchant Banking Division
    • 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
    • VRM Intel News
    • Latest News
    • Sponsor News
  • COVID-19
    • Meredith Oskenholt-Meredith Lodging-Bend Oregon
      The Enduring 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
    • All Star and SoCal Vacation Homes
      The Bright Spot in 2020 Travel: U.S. Vacation Rentals See Higher ADRs, Revenue, and Adj. Pd. Occupancy
    • 6 Takeaways from Vrbo’s 2021 Consumer Travel Trend Report
  • Marketing
    • 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
    • Elements of a Property Detail Page: How They Can Make or Break Your Bookings
    • VRMIntel_Fall2020_Fast Paced Revenue Management
      Fast-Paced Revenue Management: The 10-Minute, $10,000 Mistake
    • 6 Takeaways from Vrbo’s 2021 Consumer Travel Trend Report
  • 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
    • 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
    • Airbnb is Finally Going Public: Takeaways for Property Managers from IPO Filing
  • Customer Service
    • Meredith Oskenholt-Meredith Lodging-Bend Oregon
      The Enduring 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

Education

Over $530 Million Invested in Vacation Rental Startups Since 2011

Over $530 Million Invested in Vacation Rental Startups Since 2011
mm
VRM Intel Staff
November 11, 2013

Over $530 million in disclosed angel and institutional funding has been raised by startups in the vacation rental industry since 2011, with 88% of that investment in consumer facing websites. Over 72% of disclosed capital has been injected into U.S. companies.

Annual Diclosed Investment into Vacation Rental Startups by Ange and Institutional Investors

Can the market support these new players?

According to the PhoCusWright’s U.S. Vacation Rentals 2009-2014: A Market Reinvented, “Vacation rentals represent a more than $24 billion opportunity in the U.S., that’s more than one fifth of all hotel room revenue and 8% of the total U.S. travel market.”

 

In addition, the Vacation Rental Managers Association (VRMA) reported the largest Annual Conference in its history in October of this year and is getting ready for their second annual European Seminar in Bruges, Belgium in December. Providing further evidence of growth, HomeAway, Inc. (NASDAQ: AWAY), the current leading marketplace for vacation rentals, is expecting 2013 revenues around $342 million.

 

Disclosed Funding for Vacation Rental Startups by Country

 

Vacation Rental Startup Investment by Company 2011-2013At first glance, the market may appear saturated. However, a closer look into the distribution of injected capital exposes market opportunities.

 

Out of $530 million in funding, over $470 million went to consumer websites with approximately $458 million being spread out among four consumer-facing websites:

  • Airbnb (U.S.): $318M
  • TruJia (China): $64M
  • Housetrip (UK): $60M
  • OneFineStay (UK): $15.9M

 

The Opportunity

Vacation Rental Startup Investment by Company Type 2011-2013Remarkably absent is investment in operational activities and services to support this sprouting marketplace. Both Vacation Rental Managers and individual home owners have increasing operational needs (i.e. websites, mobile communications, channel management, housekeeping, property management software, marketing automation, payment services, etc.)

 

Out of $530 million, less than $10 million was raised by companies providing supporting products and services to the vacation rental industry.

 

One of these companies is TurnKey Vacation Rentals, a marketing and professional management solution for individual vacation rental owners, who picked up $1.5 million in seed funding from an all-star cast of angel investors.

 

“We believe the opportunities for new consumer plays in the vacation rental market are limited with such well-established players like AWAY and now Airbnb so well-entrenched,” said John Banczak, co-founder and Executive Chairman at Turnkey Vacation Rentals. “We believe there is a huge opportunity in the value-added-services area of vacation rentals and believe the next wave of VR startups will help round out the guest and home owner experience while working with entrenched players as opposed to competing with them.”

 

Impact of Increased Online Competition on Vacation Rental Management Companies

 

VRMA President Heather Weiermann said, “As the vacation rental industry grows, vacation rental professionals have an opportunity to further define and raise awareness of the professionally managed segment. More than half of the vacation rental market’s total rental revenue now goes to industry professionals, up from 43% in 2007, according to PhoCusWright. For vacation rental professionals this translated to a more than $11.6 billion marketplace in 2012 and the total U.S. vacation rental industry is expected to reach $25.8 billion by 2014.”

 

With over $470 million injected into consumer-facing websites, online competition for travelers looking to stay in a short-term rental will likely increase, resulting in:

  • Rising online marketing expenses
  • Search Engine Optimization (SEO) concerns
  • Increased focus on customer retention efforts
  • Branding challenges
  • Inventory acquisition and retention efforts
  • Increased demand for revenue management tools and services

 

“The additional exposure is a great thing for the industry, however, it is critical that vacation rental management companies preserve their branding, “said Weiermann. “As consumers search for vacation rentals, they need to be aware of the type of accommodation they’re booking. For the first time, research from PhoCusWright reveals that most travelers prefer to go with a pro, with 31 percent of travelers saying they prefer to book with a vacation rental management company vs. booking direct with a homeowner (25 percent). Guests are more likely to associate key experiences with vacation rental management companies, such as safety and security, customer service, services such as housekeeping, concierge and dining, activities and modern amenities. Vacation rental management companies must protect their brands in order to differentiate themselves in the increasingly competitive marketplace.”

 

However, there are notable advantages to the addition of well-funded, visible players in the Vacation Rental Industry:

  • Increased education and awareness of vacation rentals as a lodging option
  • More cohesive effort impacting government regulations concerning vacation rentals
  • Increased options to homeowners and vacation rental managers to reach new guest markets
  • New and more cost-efficient technology products to help service vacation home management
  • Less fragmented marketplace

 

While the competition among consumer-facing websites as distribution channels for vacation rentals may be tightening, the opportunity for high returns in investment in supporting products and services is wide open. Despite challenges in market fragmentation, legislation and product differentiation, the multi-billion dollar vacation rental industry is here to stay as an important player in the travel sector.

 

Companies represented in report:

Funding Table by Company Name and Year
 

Capital raised by startups in the Vacation Rental Industry from Amy Mutual

By Amy Hinote
 
Sources: StartUpBeat.com, Skift.com, Tnooz.com, AngelList.com, TechCrunch.com, Angel.co, WhoGotFunded.com

Related Itemsairbnbangelcapitalcompetitionhomeawayinstitionalonefinestayoperationalshort termsoftwarestartuptrujiaturnkeyvacation rentalventurewebsite
Click to add a comment

Leave a Reply

Cancel reply

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

Education
November 11, 2013
mm
VRM Intel Staff

Related Itemsairbnbangelcapitalcompetitionhomeawayinstitionalonefinestayoperationalshort termsoftwarestartuptrujiaturnkeyvacation rentalventurewebsite

More in Education

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

Skift Short-Term Rental Summit, Dec 9 with Vrbo, Vacasa, Marriott, Expedia, Sonder, and more

Amy HinoteDecember 7, 2020
Read More

Women Need to Raise Their Voices . . . Just A Thought

Zandra WolfgramOctober 13, 2020
Read More

Vacation Rental Women Professional Development Series: Growing as a Thought Leader with Author and Speaker Amber Hurdle

Amy HinoteOctober 5, 2020
Read More

Free DARM Software Session: Changing Pricing in your PMS, Sep. 17, 11:00 am ET

Amy HinoteSeptember 9, 2020
Read More

Course Outline for Upcoming Vacation Rental Data and Revenue Management Conference, Sep 15-17

Amy HinoteSeptember 9, 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

  • Meredith Oskenholt-Meredith Lodging-Bend Oregon
    The Enduring Principles That Have Guided Meredith Lodging through the Global Pandemic, Raging Forest Fires and Personal Family Challenges
    BlogJanuary 12, 2021
  • 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
    Industry News for Vacation Rental ManagersJanuary 8, 2021
  • VRM Intel_Look Back List from 2020
    VRM Intel Brings You A Top 10 Look Back List of 2020 Stories
    BlogJanuary 1, 2021
  • Inhabit IQ Gets “Significant Investment” from Goldman Sachs Merchant Banking Division
    Latest NewsDecember 18, 2020

View Current Issue

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

All Star Vacation Homes Acquires Southern California Vacation Rentals
Lodgify
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