Analysis of Major Online Travel Agencies and Vacation Rental Listing Sites

In the last few years, the line between vacation rentals and hotels has thinned in many traveler’s minds. Formerly known as “alternative accommodations,” vacation rentals are the new norm, with research projecting a $169.7 billion market by 2019. Even though vacation rentals have been around forever, it’s just recently that they’re showing up to market themselves in the same grown-up clothes of hotels. And by grown-up clothes, we mean the in the branded web pages of major online travel agencies.

For hotels, OTAs are more commonplace, accounting for 45% of hotelier’s online bookings in 2016, according to Phocuswright. Vacation rentals have traditionally depended more on sites like HomeAway, Airbnb, Flipkey and their own branded websites. In the grand scheme of the travel industry, there’s no doubt that Airbnb will continue to haul tail on major travel websites like Expedia Inc and Priceline Group. Reports have shown that on peak nights, vacation rentals have become the more popular accommodations type.

But vacation rentals don’t stop at Airbnb and HomeAway anymore — nor FlipKey, Wimdu, or any number of niche vacation rental listing sites out there.

The increased marketing spend for vacation rentals from traditional accommodation sites (and the improved technology for vacation rental channel managers) means professionals in the space have more opportunity to increase their nights booked like never before.

Who are the major OTAs?

When looking at the different travel brands for booking and planning online travel, it can feel a bit like Coke and Pepsi, where two companies control the fizzy beverage industry. The two most prominent entities for online travel are Expedia (including brands like Hotels.com, Orbitz, HomeAway, Hotwire, Trivago and more) and Priceline Group (with travel sites like Priceline, booking.com, Kayak, and Open Table).

Some of these travel brands will let owners and managers book vacation rentals.

The cost of guest acquisition

Online travel agencies are devoting massive budgets to marketing (millions of dollars each month on television alone) and so sometimes you will see those costs in the commissions you pay. While the online channels used to only cost a hotel business between 5-10% of a their revenue, the new costs can sit around 15-25%, depending on the channel used.

On the other hand, they also come with features like rate parity and last minute availability, as Cindi Etis Green mentioned in her Demistifying the Digital Marketplace blog.

Spending this much on guest acquisition is something to always be cautious about, especially when there are other thrifty ways to get bookings.

The amount you spend on guest acquisition — whether directly on your own vacation rental website or on diverse OTAs — will be determined by your own bottom line. Out of all the online channels out there for booking accommodations, we’ve picked six major online travel agencies to help you decipher the complicated online market for vacation rentals.

6 Online Travel Agencies for Vacation Rental Managers

To create your own professional analysis of online distribution you’ll want to evaluate your opportunities, which you can begin below. As you build out the lists you’ll want to also crunch the numbers to see if it is the right OTA for you.

While creating this overview, we found that a lot of the information needed to make smart marketing decisions was spread out across several sites. We hope this document will help you save time while determining your own marketing strategy.

Note: This overview was created with publicly available information and travel websites are subject to change their pricing at any time. OneRoofotp will continue to update this overview, so feel free to bookmark this page so you can return to it. You should always confirm pricing with travel websites before activating your listing.

Airbnb

Listing Cost: Free
Commission
: Hosts pay a 3% commission for bookings that happen through the website. The guest would also be charged a guest service fee ranging between 6-12%. According to Airbnb’s website, larger reservations would pay a smaller guest fee.
Bookable through channel manager: Yes
Active users: 150 million+ guests (6,000,000 monthly users)
Number of listings: 3,000,000+
Number of Countries: 192
Trip insurance: Host protection insurance up to $1,000,000
Other traveler benefits: Airbnb’s release of Experiences lets travelers book unique and local tours in their destination city. Airbnb’s Trips function will also soon allow guests to book airplanes and rent cars.
Good to know: Hosts are paid 24 hours after a guest’s scheduled check in.
Source: Airbnb


HomeAway

Listing Cost: $349 for owners and managers with online booking | $499 without online booking
Commission: Opt out of subscription costs and pay up to 8% per booking.
Bookable through channel manager: Yes, with the minimum requirement of 5 properties
Active users: 9.8 million monthly visits
Number of listings: 1.2 million
Number of countries: 190
Insurance available: Available for purchase – Up to $1500 damage protection | Up to $50,000 cancellation protection
Other traveler benefits: Book with confidence guarantee. Learn more here.


TripAdvisor

Listing Cost: Free
Commission: 12% commission, or for increased visibility you can pay 15% commission.
Bookable through channel manager: Yes
Active users: 3.15 million unique visitors
Number of listings: 835,000 holiday rental listings
Number of countries: (145,000 destinations)
Insurance available: Owners can take a security deposit, and guests also have the Payment Protection plan for travelers.
Source: TripAdvisor


Booking.com

Listing Cost: Free
Commission: Starts at 15%. Hosts can pay more for improved listing standing, up to 49%.
Bookable through channel manager: Yes
Active users: 40 million unique monthly users
Number of listings: 1.1 million active properties
Number of countries: 212 (79,118 destinations)
Insurance available: N/A
Traveler benefits: Booking.com’s message is that they will get travelers the best rates and the most diverse accommodations, plus they tout 0 cancellation fees.
Source: Booking


Expedia

Listing Cost: Free
Commission: Negotiated. Starts at 10%.
Bookable through channel manager: Yes
Active users: N/A
Number of listings: 510,000
Number of countries: Global
Insurance available: No
Traveler benefits: Book your flight, accommodations, and rental cars all at once. Low-price guarantee.
Source: Skift


Priceline

Listing Cost: Free
Commission: Negotiated on a sliding scale.
Bookable through channel manager: Yes
Number of active users: N/A
Number of listings:  635,000 properties
Destinations: Global
Insurance available: No
Traveler benefits: Book your flight, accommodations, and rental cars all at once.
Source: Skift


Three OTA Takeaways

1. New opportunities show that vacation rentals are gaining further traction

Vacation rental owners and managers have worked really hard to increase their visibility, provide unique experiences, and grow their nights booked. The travel industry responds by bringing what non-traditional accommodation into the mainstream.

But what does it mean for vacation rental managers who have been building their own brands online?

That the major travel sites now let guests book their stays in a professionally managed home while also booking a flight or a rental car doesn’t necessarily mean that your brand will take a full hit.

Research from Cornell University showed that hotel brands using major online travel agencies, Expedia in this case, actually gained legitimacy from listing their rooms on Expedia. Visibility can lead to gained trust and direct bookings through what’s called the Billboard Effect. As vacation rentals gain traction in marketplaces previously dominated by hotels, it will be intriguing to see how the Billboard Effect translates as well.

2. Experimentation is key

Every vacation rental business has its own professional objectives.

Your business should have clear goals when you decide to turn on your channel manager. Because here’s the thing. When vacation rentals, listing sites, and travelers mix, they don’t yield the same result for everyone. We reached out to Matt Landau of the Vacation Rental Marketing Blog and Los Cuartos Tulipanes to share his experience when testing out Expedia.

Our goal, like many other owners and managers, was to diversify the different sources that produced bookings. Because it seemed irresponsible to our business to be relying on any one channel too much. We signed up with Expedia.com and immediately got results. However, there was a catch.

Guests who booked through these platforms seemed to be different from our bread and butter guests. Because we weren’t able to communicate with them prior to the stay, the nature of the relationship was more transactional (and less “small business to patron”) than our normal guests. Expedia guests came less prepared for the neighborhood (an emerging ghetto), less attuned to my company’s unique (read: weird) business values, and less excited in general about the whole experience.

In the end, after about six months of experimentation, we decided to discontinue with Expedia because we valued quality of bookings over quantity of bookings. I like how we got accepted warmly by Expedia, were delivered bookings with very little effort, and were permitted to cancel without any fees. Expedia was a very rewarding vacation rental experiment in my book.

What I like about Matt’s story is not only his openness to embrace new marketing techniques, but the clear values he put to the test.

3. Diverse marketing is easier (and more important) than ever before

Channel managers make your business more connected to more places, but that’s not the most interesting part about them. The most interesting part is that all your bookings are then stored in your own CRM — customer relationship manager. A booking, no matter where it came from, means potential for future relationships.

We’ve seen successful relationships build between host and guests who book again in the future time after time. But instead of re-booking on HomeAway, guests book on your vacation rental’s website. Successful hosts have done this through social media engagement, email newsletters, keeping a blog, and making special offers to past guests that wish to book again. And as you start to get these relationships and consistency, your brand can grow.

What does it really mean that the big players in travel now let vacation rentals book online? Well for one thing, a huge increase in marketing spend. If you leverage these opportunities, they can help you get more bookings that you may not have gotten otherwise. With a channel manager for your vacation rentals, you can distribute, maintain, and (if needed) take down inventory with much less effort.

Need help deciding on what channels make the most sense for you?

OneRooftop’s channel manager gives you the opportunity to distribute and maintain your properties on hundreds of online marketplaces. Reach out to support@onerooftop.com to learn more.

 

Cover Photo Credit: Guest Spaces

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