2016 Vacation Rental Year in Review

Astrid LindstromLeave a Comment

Vacation Rental Industry Year in Review: 2016

2016 was the year we said farewell to vacation rental as a cottage industry. From enormous shifts in the structure of the biggest listing sites to the federal government creating a tax structure for short-term rentals to major travel sites actively promoting vacation rentals alongside hotels and rental cars, vacation rental has gone undeniably mainstream.

The transition hasn’t been easy on homeowners, but it has brought more travelers than ever before to book vacation rentals instead of “traditional” accommodations. It’s forced cities to acknowledge that vacation rentals are a highly-desirable asset to their local tourism economies. And it has ultimately paved the way for healthy growth in 2017.

We’re taking a look back at 2016, which was a big year for growth not only for vacation rental as an industry, but for us as a start-up striving to help owners provide the professionalism travelers are beginning to demand – while giving them the autonomy to keep vacation rental personal.

HomeAway Changed … Well, Everything.

At the beginning of the year, HomeAway announced that it would begin to charge a traveler fee on bookings made on VRBO and HomeAway, following in the footsteps of its fellow short-term rental listing sites Airbnb, FlipKey, and TripAdvisor. They also eliminated the tier structure, instead ranking its properties by the parameters of a search algorithm called Best Match.

To attract a new market of travelers to book vacation rentals, the company rolled out a massive Whole Vacation marketing campaign, including a commercial directly calling out the downsides of Airbnb-like homeshares and a contest to be the first guests to stay the night in the Eiffel Tower. Finally, HomeAway rolled out a system whereby owners could review guests, making it possible for both parties to gauge each other’s desirability at a glance.

We also saw Brian Sharples move from his position as CEO of HomeAway to its new Chairman, transferring power to well-known Expedia executive John Kim, who is serving as the company’s new President. The two respectively opened the Austin and Seattle HomeAway Summits with keynote speeches: Sharples expressed sympathy that owners are reluctant to change, while Kim made a powerful argument for why the changes will ensure the long-term success of vacation rental.

Airbnb Took on Some Enormous Battles.

In a much-shared post early this year, we suggested that many of the changes at HomeAway this year were the direct result of Airbnb’s rampant success in the short-term rental industry. Though Airbnb began as a market for homeshares, they’ve recently expanded into providing traditional vacation rentals, and have actively been leading the way in creating a higher professional standard for short-term rentals as well as reaching out to new markets.

Airbnb made several new partnerships with companies specifically catering to vacation rentals, and rolled out Airbnb for Business, which was expanded and actively promoted by several major corporations this year as an excellent alternative to hotel travel or business rentals.

Cities Went Through the Stages: Regulation, Legislation, and Acceptance.

While vacation rentals have often been caught in the crossfire, many cities are actively targeting Airbnb users as detrimental to neighborhoods, and attempting to pass regulations that prevent short-term rentals. Airbnb has been engaged in legal struggles in New York, San Francisco, Seattle, and Los Angeles (to name but a few) and has actively been lobbying politicians in Washington D.C. to accept and regulate short-term rentals.

Meanwhile, individual cities are creating wide and varied approaches to regulating short-term rentals. At the beginning of the year, many cities seemed to view vacation rental as an unknown to be feared, but at the end of 2016 we’ve seen evidence that cities are starting to embrace short-term rental as a potential boon to their local economies, providing they can be properly taxed and regulated.

More Travelers Are Turning to Vacation Rental.

One of the reasons cities are beginning to embrace vacation rentals is that they’re in high demand among travelers, particularly Millennials, who are more likely to seek out alternative accommodation that allows them to see more of a destination than its downtown. Business travelers and “elite” travelers are also looking at vacation rentals as a more practical way to spend their lodging dollars.

As more travelers turn to vacation rental as a viable alternative to other types of lodging, however, they are demanding a higher standard of professionalism from owners, including prompter response times and the ability to book online. The laissez-faire approach to vacation rental has led to a rise in reports of vacation rental scams, and owners will need to work a little harder to earn traveler trust than they may have in years past.

Evolve Stepped Up.

Longtime owners have been struggling to stay afloat in the vacation rental industry as it explodes into the mainstream, and Evolve’s value has become clearer than ever before.

Owners don’t want to give up control over their property altogether, with no say in when they rent or to whom, but they are also struggling to provide the professional standard demanded by travelers in the booking experience, which requires more man-hours and expertise than most owners are able to provide.

At Evolve, we’re focused on giving owners everything they need to make vacation rental easy again. We create professional listings that rank well on the all the major websites, field traveler inquiries promptly and professionally, and provide complete flexibility to configure on-the-ground services to an owner’s liking.

We also offer owners and their guests access to something that’s gone missing from vacation rental: access to real people.

Over 2,000 homeowners have partnered with Evolve in the past year and we’ve been heralded as the key to helping individual owners succeed in the years to come. We secured $5.5 million from highly respected investors T. Rowe Price, Allen & Company, and Annox Capital, who believe our fresh approach is the future of vacation rental management.

In 2017, we hope not only to prove them right, but to show that vacation rental isn’t “over” as a cottage industry. No matter how big this market grows, we know that vacation rental is about the people who created this industry to begin with: the owners who opened up their properties, and the guests who loved the ability to feel “at home” on vacation.

We want owners and guests alike to enjoy vacation rental for years and years to come.

Which means we’ll be here throughout 2017 and beyond, working to make everyone’s lives a little easier.

Want to be one of the few who never worries when big changes rock the industry? Our owners have been happily riding the wave of change without ever worrying about their rental income – because we make sure they’re always two steps ahead of the game. Click here to learn how we keep owners competitive in a rapidly-changing world.