3 Vacation Rental Guru Predictions For 2013


Jay William, VillaMarketers

There are a lot of REALLY smart people in the vacation rental game right now and I thought it would be great to get three of them down, on paper, predicting what we’re all about to see next. Below you’ll find the opinions of three gurus: it’s most interesting how their two views often overlap.

One of these gurus is Jay William, President & CEO, VillaMarketers. Having been involved with vacation rentals for a while now, Jay has a tremendous perspective on where the industry has been and where it’s going. And when I asked him what we should expect from 2013, here was his response:

“I think we’ll see more booking engines in 2013 being used and implemented across the board. Sites like Booking.com allow renters to book a vacation rental without having to verify availability or deal with the hassle of negotiating a rental. Within 2 minutes travelers can book a vacation rental: now that’s easy and travelers like easy.

I was speaking with our partners HolidayLettings.co.uk last month and they were just getting ready to drop their new feature of online booking. HolidayLettings is owned by Tripadvisor who also owns Flipkey (which already offers this option). It seems we are moving toward “Hotelifying” vacation rentals with VRBO sites offering “real” online booking.

Homeaway & VRBO announced their “Book It” feature in late 2012 so this is likely to be a feature implemented by more owners and used by more travelers in 2013. The entire industry is likely to follow the lead as smaller listing sites and owners implement this feature within their websites just like the big boys.

We’ve also seen an increase of request for automated booking systems from owners and managers wanting to simplify their booking procedures.

Although online booking is not a new concept, it is now becoming increasingly popular for booking vacation rentals.

Of course online booking has its challenges, as owners need to keep their calendars up to the minute, which is often overlooked by owners as they advertise on many sites. Technology is making online booking easier but it will not be foolproof and I predict there will also be plenty of double booked properties in 2013.”

[Note: I asked Tom Hale, CPO at HomeAway, what would be the most influential trend of 2013 and his response was, “It would have to be the year of “online booking.”]

Jonathan Murray, MyVR

In addition to Jay’s foresight, I also asked Jonathan Murray, Founder & CEO of MyVR.com, what he thought 2013 would bring, and he too believed it would be in the online realm.

“Everyone now has online bookings,” Jon revealed, “but online transactions are a still surprisingly low % in this industry according to several studies I’ve seen.

Jon confided in me that he thinks that 2013 is the year that online transactions take off for two main reasons:

1) He explained how there’s a huge movement towards the direct booking button. Instead of the typical back and forth between owner and renter, a direct booking button allows rentals to get booked immediately.  In fact, HomeAway just sent out a $50 incentive for folks to turn it on.  He points out that Airbnb has used it as well and several sites are now determining a property’s ranking based on whether or not they accept direct bookings, so there’s a huge inventive to turn it on.

2) Second, Jon points out that several listing sites are moving towards the free listing model, where owners can list for free, but must run the payment through the listing site in order to get paid. (Airbnb has been doing this a while, HomeAway has told investors they are working on that, HolidayLettings just announced it, FlipKey is using this model to win back owners who have previously canceled on them…etc.)

Jon believes these things will all push more and more bookings online, many of them of the direct booking nature.  And at his own company, Jon has had a ton of customers ask to add bookings to their websites, which he’ll be rolling out shortly to complement all his marketing tools and website builder.

Considering the strong opinions of Jon and Jay, I wanted to get some input from a representative of the online booking industry.

Matt Hoffman, Bookt/InstaManager

Matt Hoffman is Vice President of Vacation Rentals at Bookt and InstaManager. Here’s what he had to say about the niche he knows so well:

“For me, 2013 is the year of “Big data” and technology in the vacation rental industry. In a nutshell, ‘Big Data’ is the term used when extensive amounts of information are continuously aggregated, from a variety of sources which can be collected, processed and analyzed on an ongoing basis for the benefit – in the travel market – of both the buyer and seller of lodging.

Around the world a significant portion of the vacation rental market continues to utilize manual antiquated processes for managing their data (property details, rates, availability, etc). In a fragmented market where a large portion of the product (vacation rentals) is being managed “slightly different,” cloud based technology provides a concrete solution for “standardizing” how vacation rentals are managed and marketed globally.

As our industry grows (85 Billion in 2012), I believe this year — more then any prior — we will see a shift away from the ad hoc processes of old, as more and more companies, large and small embrace the future.  Recognizing there are challenges, the future in our industry calls for an agnostic approach where the technology available is driven not by the individual need, but the collective need. The collective needs starts with standardizing/streamlining the booking process.

Progressive companies like FlipKey/TripAdvisor or HomeAway have advanced these efforts by adding ‘Online Booking’ or ‘Book it’ capabilities thus, bringing the hotel search and booking process to vacation rentals. From here we witness the trickle down effect. Follow the leader so-to-speak where the need for capabilities such as booking engine technology becomes even more pressing for those who  previously  represented data “off the grid”.

For vacation rental professionals/companies, there is never enough time in the day. Enter vacation rental technology. As the barrier of entry for technology becomes more accessible, leveraging tools such as lead insight and booking engine capabilities will become common practice.  In turn, the days of unreliable property data (availability/ pricing) will become non-existent. 2013 will be a very exciting year.

And there you have it! These are three people in the industry who know waaaaay more than I do. And so if you were wondering about the most influential change of 2013, you need look no further. If you’re a vacation rental owner, get yourself some online booking engines ASAP. And if you’re a company offering online booking services, know you’re on the right track!


About the Author Matt Landau

Matt Landau is the Founder of the Vacation Rental Marketing Blog and the Inner Circle, two online resources dedicated to helping vacation rental owners and managers generate more bookings. Google+ | More Posts (230)

  • Great article guys, thanks for putting this on paper. With the growth of online bookings, combine with the trend of social commerce, we at Human Gravity are excited about the opportunity to not only offer a ‘book now’ option to renters, offering ‘book with friends’ will be a great way to better serve those non-family groups.

    • loscuatrotulipanes

      Like the ideal Michael. Can you provide us with a link?

  • Bravo! Great insight! Thanks to all of you.

  • Nakina Ace

    Unfortunately, you leave out the most important part of the reason for this movement toward online automatic booking and that is profit for the aggregators. The more they can homogenize and automate the lower their costs but also by forcing owners to use their financial systems they are profiting themselves and not the owners. It used to be that organizations like VRBO were a service putting buyers and sellers together. With the entrance of the cut throat players like Expedia and that crowd the owner is looked at as the target of their revenue plans.
    I am afraid my friend that even though you may think you are moving up in this industry you are just another pawn as these organizations attempt to control this market through subterfuge and pseudo improvements.

    • loscuatrotulipanes

      Appreciate the comment Nakina, as always.

      I’ll say the following here (and I say this publicly whenever I have the chance). Owners need to understand that the vacation rental industry is not for charity. Just because owners like us own the goods (the properties), doesn’t mean we are entitled to all the income, especially when we’re asking for the help of third-party assistance like listing sites.

      Of course homogenization/automation is ideal for the vendors. And of course in any competitive market, the best try to control the playing field. But they can only execute those plans if they have the demand of…you guessed it…us the owners! Which is to say, anyone who’s even remotely annoyed/pissed/suspicious about organizations trying to monopolize the industry, should ask themselves the following question: “Are these truly corrupt, unfair, and unethical business practices? Or am I simply in the unenviable position of being tethered to these organizations — unable to find renters for my property by my own means — and thus just disappointed in dependence?”

      • Juliana

        Well said! Owners should stop whining and get proactive. The situation it is only going to get worse. Listing sites know they can milk owners way more than they currently are, and they will. We still pay way less for leads than hotels pay to online partners.
        But there is a guy who figured out a David vs Goliath way to use the Big Listing Sites to his own advantage. He is a bit like Robin Hood for VR owners. Makes me feel vindicated.

      • Curt Tudor

        I tend to like your writing style. I am also a fan of blunt candor. The paragraph above is fabulous.

        I’ll side-step the debate on online bookings, but since I fancy myself as a bit of an Analytics geek, I’ll offer up my own +1 concerning predictions on big data.

        It won’t be long before each of us has access to data, and easy ways to understand the insights lurking within it, that will help each of us take running a VR from an “art” to a “science”.

        • loscuatrotulipanes

          For anyone who hasn’t explored it, Curt has a product called http://www.Rentallect.com which will very likely revolutionized the theme he talks about above…

      • Matt, this is awesome! I am glad someone loudly announced what is actually and inevitably happening. The VR industry is huge and it’s hard to bring such a massive change overnight. The problem is more psychological than technical. People by nature tend to operate in an old fashion way by accepting checks (do I dare to say cash!) and get frustrated when another potential reservation fell through the cracks – aha! neighbor accepted the guest’s reward credit card. I just spoke with Alan from DepositGuard a couple of weeks ago. Their product is meant for this. At Rentini we all hope that together with business minded people like you we will bring this change to the industry. We all aim for 2013:)!

  • Saffron International

    If anyone goes down this route, remember to consider the cash flow implications. ..who holds the deposit and for how long , do you get paid before arrival or after departure, who holds the security deposit and how are claims mediated, what happens in the (hopefully unlikely) event of website bankruptcy…are you the poor unsecured who get nothing or are funds held in trust. Who gets the interest on money held or retained….please think it through.Can you be certain of up to date availability info?

  • loscuatrotulipanes

    Another question I’ve heard raised by owners when it comes to online bookings: “If we’re using online bookings, how do we vet renters to make sure they don’t destroy our homes?”

    I’ll leave a response up to the experts…

  • TimS

    One concern I have with online booking is that it would take away my ability to do at least minimal vetting of the potential renters (keeping out the college spring breakers, for instance). I have never had a problem with renters, and attribute that to the personal relationship I establish before their stay. I guess I could still do that, though after they book on their own. Definitely like the idea of removing the back and forth! Thoughts?

    • loscuatrotulipanes

      Great question Tim. I’m going to leave this answer up to a professional in the industry…

    • Claudia

      I agree! I don’t want to allow just anyone into my house. I always vet a little and then I send the online booking link. Will we be able to do this?

    • Matthew Hoffman

      Hello Tim – Great question. This is why the importance of utilizing some form of technology as I mentioned above is mission critical going forward. The future in the “online booking” process for large 3rd party providers is the integration of all data from Property Information to Business Rules. The ability to detect nightly minimum requirements, seasonal rate changes, turn day rules, or even guest qualification. I have witnessed firsthand a couple major players who have, or are in the process of, adopting this capability to be factored into their booking process. Rules can be configured which allow you to qualify the guest first, prior to accepting the booking. Aforementioned problem solved. I own a vacation property too. I want the potential customer to have real time access to my pricing and availability (saves me from answering countless VRBO emails at 11 PM). I also want to make sure it’s not a group of High Schoolers coming to Disney for Grad Night and completely trashing the place. The truth is you can have the best of both worlds. Excel won’t do it for you, but a vacation rental app already designed to store and manage this type of information will.

      For a minute, imagine you are Head of Vacation Rentals at TripAdivsor. You know the vacation rental marketplace, although very fragmented, has tremendous opportunity to grow (as it’s already been doing year after year). How do you further advance this growth and create more opportunity in the space? You do that by eliminating the barriers between the customer (travel shopper) and the authority of the property data (the RBO/VRM). How can you accomplish this if over 85% of your property data base is added manually, lacking critical bits of information, availability is more often then not, inaccurate, pricing isn’t correct, the photos haven’t been updated in years, these are just a few of the countless barriers you would face.

      The only solution is to provide your (RBO/VRM) customers with something that not only eliminates pain points in communication but connects in these rules that are unique to you and makes them transparent By giving you the ability to interact with the guest (not losing the hospitality foundation from which our industry is derived), while at the same time ensuring your information is accurate, so the guest isn’t wasting their time either.

      This is part of the standardizing process I touched on above. This is how our industry reaches new heights. When access to supply is equal in effectiveness for those meeting its demand.

  • I have some thoughts about this. One it is clearly a benefit to the big VR sites and not so much the owner when you control everything from marketing to booking. As an owner I want interaction with our guests. I want them to know we are there to give them assistance if something is wrong with their stay and that starts from the very first phone call or email. Go to book it instantly and that communication goes away. Our industry suffers from a huge hospitality management gap. People buy these homes and somebody whispers something into their ears that they can rent this a vacation rental. So they do, but they do so without ever thinking they are now in the lodging business. they do not think about guest service, about treating people as a guest, not a renter, and the quality of their linens, their furnishings and so forth is often poor. I know because I have experienced this myself as a traveler.

    So I use the initial contact as a way to emphasize our focus on the guest and it gives the potential guest reassurance of our guest centered philosophy and our professionalism when it comes to our business and our drive for good hospitality management. Take this away and I lose a potential competitive advantage in a sorry economy that is over saturated with ho hum properties and ho hum renter mentality people. I am not a fan of book it instantly.

    Unlike the hotel industry where if you stay at a Hilton or Marriotte there is a standard in quality and hospitality management from one place to another world wide. The traveler knows what they are going to get and booking it instantly makes 110% sense with this. I inquired on 26 properties recently in the Florida Keys. Within 24 hours we had 3 people respond and within 4 days we had 6 total and I have not heard from the rest. The initial book it instantly from the guest perspective is oh this is great, but honestly this will mask the poor service providers until it is too late. If somebody does not take the time to respond to an inquiry in 24 hours much less 4 days, do you Matt or anyone else really think they will be johnny on the spot when the AC breaks in the summer in the Florida Keys? Booking instantly takes away the ability to judge service of the owner or property manager in my opinion and this is a valuable metric I use in choosing where to stay when I rent a VR. I honestly think this is the weak link in our industry and until we change to a real hospitality management mind set and a true guest service mindset we will never and I mean never take market share away from other lodging modes. I never rent to a renter, ever…they are guest just as they would be at a Hilton or at Disney.

    Lastly, here in NC we have laws governing the running of a vacation rental. Property managers have to be licenses brokers in the state and the monies collected need to be deposited in NC banks and held in escrow until the end of the month. I suppose there are legal work arounds for this stuff when you book on a site based in Austin, TX. While I like the idea of a free listing, I also see how this is going to dilute my property’s exposure when the site is flooded with all this new inventory. I am one of the few owners that my manager has that advertises and I get a competitive advantage in the market place because of it. Making a site free to list then billing me per inquiry or per booking I predict results in fewer booking for me personally with all the new added inventory. This is great for the VR marketing guys as inventory goes up they look bigger but it harms the individual owner trying to eek out a niche in a poor economy with an over saturation of rentals as it is.

    In the end the big guns you spoke with look at the big picture and think it is all sunshine and roses and maybe it is if you own a big VR company, but the ripple effects especially negative ones are rarely felt by them and often felt by the owners who have their life savings in their properties. I view the big companies as a necessary evil for sure and time and again my interests in this industry are ignored. This instant booking stuff is no different it is a plus side 100% for them and while it has it plus sides for me, there are a few big down sides too.

  • Lindsay

    I am a big proponent of allowing a book-now facility for guests, but as for cash-flow then some owners may be better doing it via their own integrated booking system within their own websites rather than via a 3rd party listing site.
    Also, depending on average weekly rate and the % taken per booking, it might just be cheaper to pay for the annual listing and keep a hold of your own bookings.

    However on the plus side, I know that funds are held in Escrow or similarly secure systems with the book now options, until the guest has arrived without problems, which in theory means a lot more comfort for the guest knowing the rental wont just “disappear” or be fictitious.
    This must give more security to the traveler (I was shocked how easy it was to list a place with Flipkey) and potentially will see more bookings for the owner, but unfortunately at the expense of that personal contact.
    I think a lot of that problem can be overcome by tailoring your marketing clearly towards the type of guest you want to attract, and especially if you have your own website – installing a book now system can still allow you to “vet” each guest before hitting the accept button, but it also means you could capture their intention to book far more effectively before they go off the boil while waiting for an email reponse

    • Great point, Lindsay! A call to action button on your own website is a must! I do online booking on my own website since 2004. Isn’t it awesome to give guests a website name over the phone or via email, go to bed at night and discover a fully paid reservation in the morning?

  • Juliana

    To all owners concerned about “online booking”:
    The biggest misconception about online booking on listing sites is that owners think you can’t screen. All listing sites allow owners to accept or decline a booking done online. You can ask questions and do a little screening if you like. The ability to refuse the booking is a feature in Airbnb, homeaway and flipkey. I know because I do it with my listings. Have no fear. This is the least of our problems, believe me.
    The big issue I think is that listing sites are being more and more controlling of the whole relationship with the guest. People book my property through Airbnb and they think they are dealing with Airbnb, not ME. It sucks! All other listing sites are following the Airbnb model and converting to their big brother way of doing things. So, for all of us, the best remedy is to go “Matt’s way” all the way, and eventually NOT depend on listing sites to make a living. I am, and 2013 is, for me, the year I wish I will stop caring what listing sites do.
    Viva Matt!

  • Cherry B

    Great article! I work for Roomorama, and we agree that ‘real’ online booking is the future of the vacation rental industry. It’s about time that booking a vacation rental is as simple and seamless as booking a hotel.

    Roomorama has been working hard to make these predictions reality. For regular private homeowners, we have already rolled out the “Book Now” feature, where guests can make a payment immediately and the host has 48 hours to confirm the booking. Book Now speeds up the process for guests looking to book, but still allows owners to screen their potential guests. Very soon, we will also be releasing Instant Bookings for many of our properties, and we believe this will really take the consumer experience to the next level!

    • Matthew Hoffman

      Hello Cherry – You and I should connect. My email is matt@bookt.com. I would like to talk to you regarding Roomorama if you have time.

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  • Nick Marshall

    I agree with many of Bob W’s points. However, I am not against having an instant pay button if that is what the customer wants. The biggest issue will be the potential for double bookings unless the instant payment is subject to a 24 hour confirmation period which rather destroys the purpose of an instant booking button. There will be many double bookings which will surely damage the credibility of this industry. Having a true instant payment/booking button means that an owner is tethered to the one booking/calendar system. Essentially, an owner will become captive to that listing website. If owners are happy to let this happen then a few years from now the whole industry will be controlled by two or three giant listing companies who will be able to dictate terms to their captive owners. Now is the time for owners to get together with other owners in the same regional market and build their own websites. I run a website listing just 20 properties in one region of Australia and we get more bookings for our owners than the larger sites because we provide real customer service. We are locals living in our market. We know all of our properties, we know our owners and we know our region. We have knowledge which is available by email or phone 7 days a week. The big listing sites do no more than list and by virtue of size can swamp the organic search listings. There is no customer service. If Google continues to rank website authority higher for large national/international listing sites over local niche listing sites who really have more true “authority” for their local market, then they will be destroying competition and damaging their own cause. Without the smaller sites jockeying for a position in the SERPs, the large sites will have no incentive to pay Google Adwords and the smaller sites who also pay for Adwords will be gone.

    I am installing a payment system which will pay the owners directly. I am doing this because the renters want it. The reason being that many travel decisions are driven by airline discounting. The customer books their airfare and then wants to secure accommodation as soon as possible. Yes, I am sure there will be issues with regard to screening customers but I am sure we will find a solution. I have to say, though, after nearly 30 years in tourism, the number of truly horrendous customers I have encountered is less than the fingers on one hand.

  • I’m obsessed with data and to my understanding, the way you use data is your way to successful VR promotion. Reality is, this year is a period of online marketing game. It’s mainly about circulating your data using these search engine optimization white hat techniques and make sure that people understand why they need to choose your place. If they can’t see the data on your listing site then it’s hard to expect success. Therefore, you may be the the owner or the manager, it’s up to you how you’ll make data works to your advantage. Because the more and the useful data are, the higher the chance they book online.

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  • Margie Papier

    Great article friends, I think this is the great information
    about vacation renter business. It is great data for online booking and property


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  • Jean

    We have had an onlinebooking system on our site for 7 years now but many guests still seem reluctant to use it. All our guests get the personal touch ie phone call and encouraged to phone us with any queries whether they book online or not. We are a memeber of Enjoy England with an annual assessment and a 4* rating so it is important to us to maintain the standard.
    Whenever possible enquiries are handled as soon as they arrive in our inbox.
    Customer service is paramount to our business

  • BJ

    I am listed on booking.com and airbnb. Airbnb’s system works better because they allow you to put as much information in your listing as you want so the customer knows exactly what they are booking and what your “house rules” are. Plus they allow you 24 hours to accept or reject the booking. This prevents double booking from other sites. They charge the customer between 6-12% commission on the rental rate. The owner gets charged 3% commission for credit card fees. Payment is released one business day after the guest checks in. This usually takes a few days to process. I do not like Airbnb search results though. They are misleading to the customer and also do not benefit the owner. They do not list properties in the actual “search area” first. They may list pages and pages of properties an hour away first. Then customers don’t think any properties in the area they want to visit are available.
    As for booking.com, they have a ways to go. They write your description for you, which is extremely short and poorly written. So basically, they tell you that they know better what features should be listed about your property. My “fully equipped kitchen, stocked with cookware, spices, etc., with brand new appliances” was turned into “a microwave, refrigerator, and coffee facilities are available.” The plus about them is you do have more flexibility in choosing your own cancellation/refund policies versus Airbnb.
    Once a customer books with booking.com, you do not have the option to reject or accept. You will be provided the contact info right after booking. If you call the customer and find out they are coming with their buddies for spring break, you will have to convince the customer to call and cancel. If they do not wish to and insist they still want to come, then you have to accept it. You pay a 15% commission plus you process your own credit cards. On the day of reservation, we can charge 50% of the price and 30 days out we charge the balance. It’s confusing for the customer to receive a paypal invoice from me, because they think booking.com has processed their credit card. I just refuse to pay 3.5% to square for manually entering credit cards.
    If every site works like booking.com and all calendars are not integrated then this system could never work. If I accept a reservation through Airbnb and a few seconds later someone books those nights on booking.com, I am now double booked. Currently, I have to go to the booking.com calendar and close off the dates before I click the “pre-approve” button on Airbnb. Then I still have to wait for the customer to confirm they want to book. So now I am missing potential bookings from another site, only to protect myself from being double booked. Add a few more sites into the mix, and this could be a nightmare.
    Another thing is booking.com, like others, want you to agree that your property will not be listed for a lower rate on other sites. This is ridiculous because the clientele we receive from Airbnb is totally different from the customers from booking.com. We don’t charge a cleaning fee on Airbnb and the house is left in great condition. Booking.com we charge higher rates plus a cleaning fee and the customers do treat your home more like a hotel. We have less competition on booking.com so we can charge higher rates. I have been on vrbo for a few weeks now, and not one single inquiry has turned into a booking. It is probably because my prices are higher in an already saturated area. So, it is unrealistic if each of these sites tries to tell homeowners that they cannot price according to their competition.

  • BJ

    Another thing too….booking.com, expedia, etc. will put a “show prices” button on your trip advisor listing. This will then take the customer through their site and the owner now has to pay 15% commission. You could have brought the customer to your own website and then when they go to read your trip advisor reviews, they decide to book. There is no option to remove these buttons. So in essence, the big listing sites do control you, even outside of their own booking engine.
    Going through that same button mentioned above in trip advisor, it will show your dates as unavailable because the dates are not open through that booking engine. So, if someone wants to book dates a few months in advance, but you do not list dates on booking.com until a couple of weeks in advance, then the calendar will say your dates are unavailable, and will show other property options. You could really have those dates available and drive potential customers away who began at your website but tried to book through the button on trip advisor. That system does not work at all for a homeowner.

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  • Alchemy Tech Solutio

    There seems to be be alot of vacation rental sites popping up everywhere. It must be a strong market. Theres a new kid on the block that is hoping to challenge airbnb.com. http://www.reservationresources.com is changing the way people travel

  • spotted elk

    this all sounds wonderfull but you better do your homework get all the insurance possible double check insurance to make sure what they might may or may not pay for get all the refferals you possibly can on home owner get a copy of rental agreement pay with a credit card thru paypal realize that paypal doesnt cover fraud on services get a list of lawers in rental area go over rules on how to get a court judgement in case you might have to put a lien on refund you are entightled too hope the key works when you get to the rental and oh ya enjoy your stress free adventure forgot to beware of phishers people who hack legitimentt renters websites