At this time, too much to our collective horror, we are the unwitting pawns of the last listing sites. These sites, with their multi-million dollar advertising budgets and splashy television ads, suck all of the virtual air out of the room – leaving those of us with the actual product to sell wondering what happened and where its all going next.
I give you this challenge – without specifying dates, find a property that you know to be on one of the large listing sites, using a geographic search. Try it with one of your own properties. I have done this and it can take FOREVER to find a specific property. It doesn’t matter what ‘level’ of listing has been purchased or if $300 or $1500 has been spent on the listing. They are ALL impossible to find. So the extra money to supposedly buy a higher position looks like money wasted. With hundreds of thousands of properties, the large listing sites are a horrible way of locating possible rentals.
The addition of availability limitations by date is essential for the user. It is also the death of value to the property manager or property owner. It does make sense to help the consumer by narrowing their search to properties that may be available for the dates they want. But if the majority of searches are based on a date limitation, what is the value to the owner or manager of a higher-cost listing on the listing site when ‘availability’ is factored in? ‘Availability’ levels the field and removes most (or all) of the advantage of a higher-cost listing. Clearly, there is no advantage. The more that the listing sites narrow the search in ways that benefit the consumer, the less it will benefit the vacation rental manager.
One of the main issues with a large listing site for locating vacation rentals is that they had been based upon a hierarchical menu. That is to say, a visitor starts with a region or country, and burrows down to state or province, and then down to the local area where they will find (now) several hundred listings…at least. And in that list, it is nearly impossible to differentiate between listings to determine the right one for you. As a hierarchical directory grows in size, it becomes increasingly complex. Few people remember that Yahoo! Began as a hierarchical directory (in fact, the name stands for “Yet Another Hierarchical Officious Oracle”) but as the Internet grew, that structure became unmanageable and Yahoo! changed into a more search oriented and less hierarchical structure.
Today’s traveler is more likely to go to a search engine like Google, Bing, MSN, or the current form of Yahoo! and enter a variety of search terms only one of which is location. Your results will most likely result in a list of potential places – including pages from the large listing sites. The pages linked from the listing sites will be deep-linked to the specific page and will bypass the entire hierarchy. It also will bypass the listing site’s ranking system where listings pay for placement.
If you go to a large listing site and enter “Kalapana hot tub”, you will see the three properties in Kalapana (but not Kalapana Sea View except for one that is in the incorrect category). None of them has a hot tub. And if you misspell any words, you will most likely encounter the all-too-common message “Oops, you stumped our search engine!“ Do the same search (even with the misspelling) on Google or other non-hierarchical search location and you will find more options, from multiple websites – showing that Google (or Bing or Yahoo!) is a better choice than the large listing site. All the search engine options are a deep linked directory to the property, reducing the risk of the person being distracted to alternate properties. Again, it doesn’t matter if a $350 subscription or a $999 subscription was bought – the search engine takes you directly to the page.
Vacation rentals are going mainstream. There is great interest from many parties in the travel marketplace of integrating vacation rentals into their product mix. My personal belief is that the large listing sites are positioning themselves for an acquisition by another company within 3 years. I suspect we will see several acquisitions by an Expedia or Travelocity or similar company. If the large listing sites had the intent to remain in the independent vacation rental marketing space, there would have been acquisitions or divestitures recently that would complement that goal. There have not been. There have been opportunities, but none of the large listing sites jumped at the chance.
There are new players in the same marketplace as the large listing sites. There is AirBNB, which I originally thought would implode, but AirBNB is showing an admirable adaptability. Companies like booking.com that have focused on hotels and resorts are moving into the vacation rental market, but they are doing it in a cautious and thoughtful way – which will contribute to their success. Anyone who has worked with booking.com knows they have some “significant opportunities for improvement” (lets just agree to call it that). I think they will improve and will become even more important.
Companies like Expedia and Travelocity have no grasp of this market and no patience so that is why one of them will acquire a large listing site company. Those companies will spend billions to gain entrée into this market space, as it is the fastest growing segment of the travel world.
Expanding markets always attract new players. The steadily increasing market acceptance of vacation rentals will ensure the people we cannot even currently anticipate will enter the market in the next few years.
In time, the growth of vacation rentals and the relative glut of properties in any area will continue to lead to a deterioration in value for massive vacation rental directories. Prominence and position will be the reward for those that provide added value. Giving information on local attractions, restaurants, tours and advice will lead to recognition as a subject matter authority.
Subject matter authorities are rewarded by position, prominence and high search engine rankings.
Position and prominence lead to trust by the public.
Trust leads to bookings.
While everyone knows someone who thinks the Internet is a ‘fad’, most people accept that it (or some future version of it) will be around forever. In every industry, and especially in travel and hospitality, the Internet will continue to profoundly affect every business.
Back when the Internet was mostly the providence of the government and military (and the general public had extremely limited access) there were systems like Gopher, Usenet and IRC. Those have fallen by the wayside now (although they do still exist) in favor of the web. Now, things like smartphone apps are using the backbone of the Internet to provide information and communication just like Usenet used to. In many ways, they are a new form of Internet, much like the World-Wide Web was back when it first left the CERN laboratories. And this latest incarnation (what some call “the mobile web” or the “Internet of Things”) is not going away.
Just in our own experience, the number of people researching vacation rentals from either a tablet or smart phone has exploded. In a recent month, 25% of the people on my company’s websites were accessing them from a phone or tablet. Even just a year ago, that percentage was far less, and two years ago it was almost zero. It will not stop growing and increasing. Long term, every vacation rental company will need to factor in this change in demographics.
It has always been known that static websites lose positioning over time. It is crucial that a vacation rental company’s website be dynamic and change over time with new content and information.
Search engines not only rate content based on the frequency of changes, they reward content that is not purely descriptive or “sales-y”. A vacation rental company website that contains restaurant, tour, and attraction information with references to vacation rental home options appropriately mixed in will be rewarded handsomely. I will be the first to admit that I have a lot of work to do in this area myself.
Video is still an untapped resource in the vacation rental world. The combination of visual and auditory is powerful. Our initial testing has indicated that approximately two minutes is the optimal period for a video but that multiple videos per property are productive. Video gives a greater sense of trust and personality than static photographs can express.
If anyone had said five years ago that reviews would have the power they do now would have been laughed at. No one is laughing anymore. Reviews can definitely contribute to the success of a vacation rental – and they can hinder it just as dramatically.
TripAdvisor is the first significant travel aggregator to ‘get’ the combination of the two – reviews and social networks. They link your Facebook friends to reviews on their site so that you can see that someone you know reviewed a specific restaurant, vacation rental or tour. There is no more trusted review or recommendation. The aggregation of social network information into reviews and recommendations will increase.
If there is one thing to be extracted from this discussion, it is that one approach alone is insufficient. An approach that incorporates all of these in varying and variable amounts is a more successful approach. The components of a comprehensive approach will feed upon and reinforce one another.
As discussed earlier, the large listing sites have, through acquisition, cemented itself into a strong market presence in the vacation rental world. However, their focus has shifted from serving their customer in the best possible way to attempting to create a closed ecosystem of products and services (cross-selling).
Some of the large listing sites include competing properties in their communication with travelers. When a customer inquires about Property Zena, the confirmation email includes Property Alpha and Beta with a note promoting those as options to Property Zena. As someone who paid to have Property Zena advertised on HomeAway, this is incredibly distasteful. Imagine going and ordering several cases of Coca-Cola online only to have your confirmation email include the statement “Have you considered Pepsi? Click here to see more”? There is not a single customer of the large listing sites that is in favor of this cannibalization of their marketing efforts. Their customers have protested these tactics. The listing sites have ignored those protests. That disregard for the customer will hurt them in the end.
Eventually, reality will sink into the market and the listing sites will either decline or stagnate in both market share and capitalization. At that time, I expect to see one of the larger OTA (online travel agencies) acquire them.
Priceline owns booking.com, which deals primarily in hotel rooms. However, booking.com just launched villas.com, a vacation rental website, in April of 2014. This reflects their (and their parent company’s) interest in the vacation rental market. With a market capitalization of $67 billion, Priceline is in a position to acquire several large listing sites if they wished. While speculation in the industry focuses on Priceline, they are not the only potential acquirer of listing sites out there.
Even if the listing sites remain independent, their structure and focus will have to change or they will become irrelevant. The current model for the listing sites is self-limiting and those sites are already effectively hitting their functional size limits. If they become much larger, they will drive away both advertisers and travelers due to the sheer difficulty of navigation and over-saturation in many markets. There are a few things that could happen:
The market for vacation rental listing websites will splinter into more regionally- or locally-oriented websites.
The winners in the market will be those that have actual valuable content (something other than just lists of properties) and that have a comprehensive approach including social links, reviews (and not just of properties), video and more.
The continued trend toward deep linking and fragmentation will ensure that these regional directories will perform more like the website of the Maui Visitors Bureau or the Big Island Visitors Bureau (every area has these – I’m just familiar with those two). People pay for membership and those sites feed visitors to the individual company’s websites. This will allow the companies with more comprehensive and complete websites to ‘capture’ more of the visitors and retain them. Retention = bookings.
There has never been any doubt that we are in an industry in flux. The situation changes daily. Sometimes it changes hourly, it seems. Time will tell where we go next. It should be an interesting journey.
-John Dirgo, www.BigIslandVacationRentals.com; www.Maui-Vacation-Rentals.com