As of July 11, 2016, you can no longer buy your way to the top of HomeAway search results.
Platinum, Gold, Silver, Bronze, and Classic subscriptions are no longer available on HomeAway or VRBO. There is only one subscription option: the Annual Subscription, priced at $349 – or approximately what a Classic subscription used to cost.
Why would HomeAway give up the millions of dollars in revenue they used to make annually on tiered subscriptions in favor of a single low-cost one?
HomeAway is making a fundamental shift in the way vacation rentals are presented. It’s no longer going to prioritize the owners who can pay the most money.
Instead, it’s going to prioritize the owners who can give travelers what they want.
What Wasn’t Working
As every longtime owner knows, Platinum subscribers get priority ranking in HomeAway search results. If you had a Platinum subscription, it was a guarantee that your property would be ranked above a Gold subscription. If you had a Gold subscription, you’d be ranked above Silver.
Whether or not your property was likely to result in a booking? Not so much a factor.
Within any given tier, results were sorted according to Best Match, which prioritized properties according to what the traveler was likely to find appealing. But since these results were bound within tiers, a traveler could be presented with lots of mediocre Platinum listings before he saw anything resembling a property he wanted to book.
Frequently, that traveler would get fed up with his exhaustive hunt. HomeAway reports that under its tier subscription system, 95% of travelers leave the site without making a booking.
HomeAway realized that if any owner was going to secure a booking from any given traveler, the results had to be better tailored to what that traveler wanted.
Which is why HomeAway is levelling the playing field. Instead of sorting by the size of the owner’s investment, they’re going to sort by the suitability of the property for this particular traveler.
What Will Happen to Tiers?
First things first: if you have a tier, it’s still going to retain its priority status. Since tiers are an annual subscription, it would be impossible for HomeAway to cancel them overnight.
Tier subscriptions will be honored for as long as they last, but as they expire owners will only be able to enroll with the new Annual Subscription or Pay-Per-Booking.
By the end of 2017, all tiers will have expired and every HomeAway and VRBO listing will be sorted solely by the Best Match algorithm.
The transition will happen gradually, both to give tier subscribers a chance to get their money’s worth and to give owners time to update their listings to perform within Best Match. If a Platinum owner was previously coasting on her tier to make the top 10 results in her area, she’ll have time to make necessary changes to her listing before her tier subscription expires.
Tier subscribers will continue to hold the ranking they paid for through the lifetime of their subscription. Platinum listings will continue to appear above Gold listings, Gold above Silver, and so on.
As those subscriptions expire, they will be replaced with properties that rank highly in Best Match.
High-ranking Best Match properties will also fill in the empty spaces left when a traveler’s search excludes a tier-subscription property. If, for example, a traveler searches for dates when your Platinum listing is already booked, the vacated slot will be taken up by a Best Match property.
Within tiers, Best Match has and will continue to determine the order in which those listings appear. If there are 100 Platinum listings in a market area, Best Match is the algorithm that decides which Platinum listing is #1 and which is #100. If your listing is the best of all the Platinum listings according to the Best Match algorithm, it will appear first.
The final word on the transition from tiers to Best Match? Regardless of whether you currently hold a tiered subscription, the way to get your best possible ranking for any given search on HomeAway or VRBO is to be sure your property performs well in Best Match.
Best Match Vs. Filters
Filters are the parameters travelers set on their search. The most common filters are dates, but travelers can also filter by occupancy, price, and amenities. A traveler might filter their search to only show properties with a pool, for example, or only properties that offer Wifi.
Filters dictate which listings appear in a given search. Best Match dictates in what order those listings appear.
Let’s say there are 500 properties in a given area. The traveler filters for a certain week in September, bringing the number of available properties down to 250. They then filter for the property size and amenities they’re looking for, bringing the number down to about 25 listings.
Best Match runs its algorithm on each of those properties, and decides which of those 25 listings it thinks the traveler is most likely to book. Best Match then presents the search results to the traveler in that order.
This is why you cannot appear at the top of every single search for your area. Practically every traveler uses filters to find the property they want, and yours can and will be eliminated from the results if the traveler expressly says they do not want a property like yours.
That sounds like bad news, but it’s actually not.
That traveler was never going to book your property. If that traveler’s two requirements are an AC and Wifi, and you don’t offer one of those amenities, there was practically no chance of them booking your property even if it was the very first one they saw.
Instead, your property is only going to appear to travelers who really want to book a property just like yours. If you’ve optimized your property for Best Match and it’s a good fit for this traveler, yours will be one of the first results that traveler sees.
Owners who rank well in Best Match will get fewer tire-kickers – and more bookings.
How Does Best Match Decide What Properties Should Appear First?
The million-dollar question.
You want your property to appear high on the list for every possible search, so what makes Best Match see your property as an eminently bookable one?
The answer can get fairly complicated, but the short version is this: your conversion rate.
If travelers consistently book your property after viewing your listing, you will rank very high in Best Match.
Your conversion rate is simply the number of travelers who choose to book your property divided by the number of travelers who looked at your full listing. If 100 travelers look, and 1 traveler books, you have a conversion rate of 1%.
Under the tier system, if you were the first listing result in your area, your conversion rate could be abysmal, and you would still get bookings. A property viewed by 10,000 travelers a week only needs to have a 0.0001% conversion rate to make a booking.
This is why Platinum properties historically did so well. Most travelers click the first option presented, and playing the numbers, at least one of those thousands of travelers was likely to make a booking.
Unfortunately, the rest of those travelers didn’t see what they wanted and left the site without booking with any owner. The old tier system worked nicely for the Platinum owner, but not well for owners overall.
HomeAway wants to make it easier for travelers to find the property they want – so that out of those 10,000 travelers, they don’t just get one booking for one owner. They get 100 bookings, for 100 owners.
So it’s going to use Best Match to show your listing only to travelers they think are really, really likely to book your specific property.
Which, once again, means Best Match properties will get more bookings.
How Do I Boost My Conversion Rate?
If you’ve been listening to HomeAway’s seminars, you’ve heard about a few factors that should help you rank higher in Best Match.
Whether you have attractive photos that show all the features of your property. Whether you have an accurate calendar and a prompt response time. Whether you have competitive pricing and online booking.
All of these factors have been historically proven to increase your conversion rate.
These aren’t made-up factors. No one at HomeAway arbitrarily decided that they thought travelers wanted professional photos. They looked at the historical data and found that properties with professional photos were much more likely to get bookings.
The entire Best Match algorithm is based on observing the behavior of millions of travelers and figuring out what features convince them to book.
That is one of the reasons HomeAway is encouraging online booking so heavily. First of all, travelers are twice as likely to book with properties that have online booking. That is an immense uptick in conversion, and HomeAway cannot ignore it.
But while online booking is a huge factor in which properties are more likely to convert, it is also the only way HomeAway can determine whether your property is converting at all. If you make all your bookings offline, HomeAway has no idea how good your conversion rate is. There’s no data.
If HomeAway cannot see the bookings you make, they will assume you aren’t making any.
We’ve seen a lot of owners say that the reason they want to book offline is to save travelers the fee. And for travelers who have visited before and never paid a fee, that’s completely reasonable. Go ahead and make that booking offline. That single booking is not going to adversely affect your conversion rate.
But you also shouldn’t be concerned that the traveler fee is going to turn away travelers who are brand-new to the concept of vacation rentals.
Because when you get right down to it, Best Match is based on what factors travelers are willing to pay for.
When travelers can easily find what they’re looking for on HomeAway and VRBO, they will start seeing vacation rentals as a real, viable lodging option that’s as easy to use as a hotel. They will come back to the site again and again for that easy booking experience. They will start telling their friends that it’s easy to find a vacation rental – just go on HomeAway.
Which means – one more time, for the seats in the back – more bookings for every owner ranked highly in Best Match.
Why the Change?
Changing their entire structure to focus on what the traveler wants rather than what the owner is willing to pay for is an immense shift for HomeAway, and many owners are wondering why this change is happening and whether it’s going to work for them.
So let’s talk about the elephant in the room. Let’s talk about the money.
With these changes, HomeAway will make more money. The better their search algorithm works, the more travelers will book properties, and since the bulk of HomeAway’s revenue now comes from the traveler fee, they stand to profit significantly.
But so will owners.
HomeAway previously earned its money primarily on tiers, so it made the tier system as good as possible. They had little financial motivation to make the search algorithm ideal for travelers; they weren’t making any money off of a better search algorithm.
They still put work into it. They made sure the algorithm sorted the best Platinum listing to the top of the Platinum listings. But at a certain point, their obligation to tiers made it impossible for them to optimize the experience for travelers.
If the property that was the best fit for the traveler happened to have a Classic subscription, HomeAway could not show that property to the traveler. They had to show the Platinum, Gold, Silver, and Bronze listings first.
So the traveler didn’t make that booking. They went away, having failed to find what they were looking for. And some nice Classic-subscribing owner went without a booking.
HomeAway realized that the tier model meant they were actively working against both of their customers. They weren’t giving owners their very best chance at making a booking, and they weren’t giving travelers their very best chance at finding the right property.
Instead, they were just giving the highest-paying owners priority placement. Which worked out great for those who could afford to pay a premium – but not great for the bulk of owners, and not great for travelers, period.
The New World Order
HomeAway has effectively aligned its interests with owners. Owners want to make the most bookings possible with the fewest possible number of time-wasters. And with the change in their model, HomeAway now wants that exact same thing.
The better the Best Match algorithm works, the better the search results for travelers will be.
The better the search results, the more likely travelers are to make bookings.
The more bookings travelers make, the more money earned by both owners and HomeAway.
There’s just one caveat: this equation is only going to work for properties that travelers want to book – which, as we’ve explained, means properties that abide by the basic principles of Best Match.
Bottom line: if you aren’t willing to work with Best Match and want to go back to paying more to rank higher, I’m afraid you’re out of luck.
But for owners who are willing to give travelers what they’re asking for? It’s going to be an incredibly profitable new world order.
Worried about getting your property up to Best Match standards? We’re not. Every one of our properties ranks highly in Best Match, because we’ve been following these principles from the get-go and adjusting as Best Match changes. If you want more bookings without the hassle, click here to see everything we do for our owners – or call us directly at 877.818.1014 (x2).