In the vacation rental management industry, there is a current debate centered on the decision to sell travel insurance online through an Opt-In or Opt-Out sales model.
For the past ten years, it has been considered a best practice for vacation rental managers to sell travel insurance online using pre-checked boxes which automatically adds travel insurance to the total. The consumer would then have to make an affirmative decision to “opt out” of the plan.
As a result of using an Opt-Out model instead of an Opt-In model, vacation rental managers were able to increase their travel insurance sales by 30 to 40 percent. However in recent months, the Opt-Out model for vacation rentals has come under fire as the result of changes in regulations for travel insurance sales in other sectors in the online travel industry, including airlines and online travel agencies (OTAs).
Rental Guardian, who specializes in providing insurance products for the vacation rental industry, has been following the shifts in the marketplace, testing alternative strategies and researching effects on online sales of travel insurance.
As a result, Rental Guardian is recommending utilizing an Opt-Choice model, rather than an Opt-Out or an Opt-In model.
An Opt-Choice selection requires the guest to make an affirmative selection to either accept or decline travel insurance before proceeding to the payment process.
As seen in the example below, Rental Guardian believes both travel insurance and a damage protection can be sold in a compelling way, giving guests the choice without cannibalizing insurance sales.
“We believe the Opt-Choice model is preferable to both the affirmative selection model and the Opt-Out model,” said Sean Miller, Managing Director at Rental Guardian. “At Rental Guardian we have been measuring the results of using Opt-Choice in the travel industry and have found that Opt-Choice actually increases travel insurance sales while simultaneously protecting the consumer.”
Airlines were required by the Department of Transportation in 2012 to make the switch to an affirmative selection sales model, and after assessing the risks, OTAs such as Priceline.com have also implemented the required-choice option on their accommodations offerings.
“We believe this is where the industry is heading and are proactively taking steps to provide the best solution,” said Miller. “Our recommendation for vacation rental companies to move to an Opt-Choice model is based on examining the best way to protect our clients and their customers while increasing travel insurance sales.”
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