As 2017 comes to a close, it’s safe to say this year has been huge for the vacation rental industry.
Last year, we said goodbye to vacation rentals as a cottage industry, and this year, we’re feeling the full effect of that shift. “Alternative accommodations” are becoming the norm and vacation rentals have tied with hotels and resorts as the most popular places to stay.
And if predictions about the vacation rental industry turn out to be correct, there’s still a lot of room for growth – and rental income! Phocuswright estimates the private accommodation market will reach $36.6 billion in 2018.
That’s a huge and exciting number for vacation rental owners, as well as management services like Evolve, but it won’t come without growing pains.
As a player in this field, we are working hard to stay ahead of these changes and help you provide amazing experiences to your guests. So without further delay, let’s dive in and look at the biggest updates from 2017 – and what they mean for you as a vacation rental homeowner.
More Big Players are Getting into the Vacation Rental Game
HomeAway, VRBO, and Airbnb aren’t the only names in vacation rental anymore. Online travel agencies and search engines are also recognizing the monetary potential of the burgeoning industry and want their piece of the pie.
Trivago is the latest OTA looking to leap into the profitable world of vacation rentals.
Last fall, Trivago announced that it was going to start showing vacation rentals from HomeAway’s inventory in search results.
“The proportion of travelers who are considering vacation rentals is growing, and we see this as a strategic opportunity to expand our offering,” said Johannes Thomas, Trivago’s Managing Director and Chief Revenue Officer.
This year, Google also started including vacation rental listings in its results for accommodations. When travelers search for ‘hotels’ or ‘lodging’ on Google, they will get vacation rentals mixed in with results for hotels and bed and breakfasts.
This is a huge leap forward for vacation rentals.
Travelers won’t have to navigate to traditional listing sites to find vacation homes – they will find them wherever they are searching. This increase in visibility could provide an astronomical leap forward in vacation rental bookings in the coming years.
HomeAway Announces a Subscription Fee Increase
HomeAway recently announced that it’s raising its annual subscription fee by 25%. If you’re on a subscription instead of the pay-per-booking model, you will now be paying $499 per year to list your property on the site.
This is a significant jump from the current $399, and there’s speculation in the industry that it could force some owners to move over to the pay-per-booking model.
On the pay-per-booking model, owners pay a 8-10% booking fee for each of their reservations.
The impact this has on your vacation rental business varies. If you have a rental that books $10,000 worth of stays per year, your booking fee would be $800 to $1,000, so it may be more prudent to stay on the subscription model, even at the higher rate. If your annual bookings are $5,000 or less, your booking fees would be less than the $499 annual subscription cost. In this case, it makes more sense to stay on the pay-per-booking plan.
This price hike isn’t the first or only major change we’ve seen from HomeAway this year. Early in 2017, HomeAway made waves when it cut the cord on pre-booking interactions between owners and travelers in an effort to keep homeowners from making offline bookings to bypass the site’s fee.
However, it did give some of those privileges back in the recent addition of the Premier Partner program, which brings us to our next update…
HomeAway Introduces Premier Partners
This fall, HomeAway introduced Premier Partners, a program that rewards homeowners and property managers who:
- Respond quickly to guest inquiries
- Have low cancellation numbers
- Receive primarily 5-star reviews
- Process bookings on the HomeAway platform
The point of this program is to help travelers find vacation rentals that have a proven track record of satisfying guests. With the blue Premier Partner badge on your listing, travelers immediately understand that you’re a trusted HomeAway partner, and are more likely to book your property.
The outcome of the Premier Partner Program appears to be a win on all fronts. HomeAway is happy because customers are more satisfied with their experiences. Travelers are happy because they get consistently better stays. And homeowners are happy because they get more bookings.
Airbnb Moves Forward With Experience-based Travel
This year, Airbnb launched Trips, officially ushering in the age of experience-based travel. It introduced bookable classes, tours, and activities to help travelers find authentic experiences in the destinations they’re visiting. Consider it the antidote to tourist traps.
Many travelers – and Millennials in particular – don’t want to spend their vacation dollars on chain hotels and run-of-the-mill restaurants. They want to eat where the locals eat and stay where the locals stay.
Airbnb wants to help them do this with Trips, which connect travelers with one of its most valuable assets – local hosts.
As a local host, you hold the key to a great travel experience because you know the area intimately. Whether you live in that location year-round or have spent every summer vacation in the area since you were a child, you can help visitors have one-of-a-kind experiences unique to your area. You can tell them which cafe serves up the best cup of coffee and which restaurant is overpriced and overrated.
These kinds of ‘insider tips’ are indispensable to guests who want a local’s insight when they travel. And if you can provide information like this, you’re going to draw more and more travelers to your vacation rental because you can offer something they can’t get anywhere else.
Vacation Rentals Go Primetime
In yet another sign that the vacation rental industry is booming, 2017 saw the launch of “Vacation Rental Potential”. The reality TV show follows prospective buyers as they search for dream short-term rental properties in top vacation destinations. On their hunt for the perfect property, they consider:
- The rental income potential of the property
- How to develop a marketing strategy to make the listing stand out
- Which amenities will attract the most travelers
It’s clear that the huge income potential of vacation rentals is no longer a mystery to the masses.
People understand just how much money is on the table, and they’re very interested.
With a growing number of investors like these, you have to be more ambitious with your vacation rental marketing, pricing, and management to stand out. You have to treat your second home like a business – not a side project – to reach your full potential.
Evolve rises to the challenge
As the vacation rental industry changes and grows, so do we. Throughout 2017, Evolve worked hard so the 5,000+ homeowners that have joined our network didn’t have to.
We added dozens of members to our teams so we can provide each homeowner with exactly what they need to:
- Rank well on listing sites
- Book their homes with fully vetted guests
- Connect with hard-working service partners
- Get support when things go wrong
- Maximize their rental income.
In 2018, we’re looking forward to furthering our ambition of making vacation rental easy for everyone. We’re going to make it hassle-free for homeowners to share their vacation homes with guests. We’re going to make it painless for guests to find a “home away from home” no matter where they’re traveling.
There are more changes to come, but it’s our mission to stay two steps ahead of the game to help homeowners come out on top. Don’t want to have to worry about changes in the industry? Evolve takes on the challenges so everything stays the same for you. Click here to learn how we can help.