With the latest round of sweeping changes, HomeAway is once again altering their platform and heavily impacting the vacation rental management industry. HomeAway announced yesterday they are making the changes in support of their continued move to become a "booking platform," as opposed to an "advertising venue."
What do these changes mean for the vacation rental management industry? How do they affect the long-term health of the vacation business and future revenues for rental managers? And how can property managers begin to alter their marketing strategies to open new revenue channels and lessen their dependence on the OTA channels? Well, those are the questions being heavily discussed in the industry.
Here's a summary of the changes:
1) Online Booking is now a requirement. Owners and managers who have yet to enroll their properties in Online Booking will be required to do so in order to renew their listing.
2) Move to HomeAway-only messaging and communication. It looks like prior to a booking being finalized, all messaging will eventually be handled solely via HomeAway. Any and all references to phone numbers, email addresses, links to external websites, etc will be redacted and all communication will be channeled only via HomeAway.
3) Auto-declines will be penalized in search results and hidden. If the traveler doesn't receive a response within 24hrs of requesting booking, then that property may be removed from the search results and require the owner/manager to "unhide" the property when you are available again.
4) House Rules for your property. If desired by the owner/manager, travelers will be asked to agree to a set of House Rules (established by the owner/manager) prior to sending a booking request.
5) $1 Mil Liability Insurance is now automatic. All travelers who book and pay for their reservation will automatically have a $1 million liability insurance coverage included.
So what can we make of all of this? One thing is for sure: the large OTA players in the market would love to fully commoditize the vacation rental inventory and remove any and all brand loyalty at the property manager level. The are intently focused on driving a traveler to have a "HomeAway vacation experience" instead of an "XYZ Beach Properties experience" or "ABC Mountain Escapes experience". The obvious leakage of revenues stemming from brand loyalty at the rental manager level is on their radar. And they are shifting the landscape with every new announcement of changes.
The scary part is that some rental managers have their head in the sand and don't realize the risk involved with relying so heavily on the big aggregators for the majority of bookings and traffic.
We've talked to several rental managers who have made a concerted, strategic push into developing other channels of revenue. And they are loving the results. Less dependency on the major sites, more diversified revenue streams, and significantly less risk to the overall health of their companies! Just in the last 24hrs, we've heard from large vacation managers and even nationwide rental management brands who are seeing this as a golden opportunity for growth. As the market pressures and shifting landscape devour the less innovative brands, those that are aggressively moving in the digital channels will thrive!
They'd much rather keep it a secret, but many larger VR companies are pushing a significant amount of their spend into the social and digital channels. They are building out massive social families of passionate fans of the brand, working hard at long-tail and organic search strategies, and cultivating large email databases that they can consistently market to.
It's a unique time in the industry, and one where the brands who are innovative and alert will reap massive benefits from being ahead of the curve. The social landscape is ripe for growth, and still largely undervalued for the enormous amount of attention that it draws from consumers. We have seen insanely cheap CPM and traffic costs for some highly targeted Book Now campaigns that our clients have done. And we've seen engagement metrics that make you slyly smile when you realize how many thousands of eyes are on your brand for mere pennies.
It's an exciting time to be in the vacation space, and we are charged up about tackling this shifting landscape with our many vacation brands. It's a vertical where we understand the challenges our clients face, and also the industry that they are in.
There's never been a better time to really move ahead of the competition... and gain an edge in the market by pushing resources into the digital channels. When everyone in the market realizes it's time to focus heavily on social and digital channels, well.... simple supply and demand will radically shift the costs of traffic and attention skyward. You don't want to be late to this party!