The Direction of Vacation Rentals in 2016 — Were You Surprised?

onerooftop-vacation-rental-website-design

Throughout 2016, how many times did you as a vacation rental professional — an owner, a manager, a software provider — find yourself totally stumped by what just happened? Where you read or heard something and just said to yourself, “Wow..”? That’s called surprise.

In 2016, we saw new ways to market your vacation rental website and to manage your listings from one place.  Vacation rental businesses got acquired — some made changes that frustrated and others banded together to grow the industry in a more professional direction.

In many ways 2016 was a very surprising year for vacation rental growth. However, when asked to reflect back on the year many vacation rental industry experts, say that no matter how big these shifts and changes were, many were to be expected. As players in the industry continue to grow and innovate, or consolidate and collapse, the developments beg for interpretation.

Today, OneRooftop has asked four marketing experts from the vacation rental industry to weigh in on this crazy year. Each of them shares a reflection from 2016, plus they’ve included predictions for what will happen to growth in the vacation rental space in 2017.

Meet Your Vacation Rental Industry Experts

Heather Bayer

Cottage Blogger & Vacation Rental Success Podcast
Not surprising… vacation rental professionals band together.
There was little that surprised me about the industry in 2016. But it was clear from networking with people across the industry that there is a groundswell of dissension among owners that may well grow into something powerful in the new year.

Similarly, it was pretty much expected to see increased bans on vacation rentals in cities like Berlin, or legislation enforecement in New York and Santa Monica. Matt Curtis spoke at length about this in his Keynote address at the Vacation Rental Summit in Toronto, where he encouraged owners and managers to unite to present a collective voice to legislators.

In 2017, I’d expect to see a growth in collaboration.
Owners and property managers will create alliances, much as Matt suggested, in a bid to reduce the reliance on OTAs.

With traveler fees, short-notice cancellation issues and the loss of control that is coming as standard with a listing on the large sites, there will be a movement towards independence that is more vocal and more organised than we have seen in the past.

 

Thibault Masson

RentalPreneurs and Booking.com
Biggest Surprise: Disappearing act by some major players.
Overall trends have been what a lot industry observers had expected. For instance, big listing sites pushing properties to be fully online bookable, as well as more and more instant bookable (Disclaimer: I also work for Booking.com, one of those major players). On the other hand, one surprise was the disappearance of several high profile industry actors, some being bought up by others in a wave of consolidation and others going bankrupt.

For instance, intermediaries like LeisureLink in the US and Vacasol in Europe ceased operations. Wimdu, a high profile internet startup backed up by the powerful internet group Rocket Internet, merged with competitor 9Flats and then sold itself to property manager Wyndham Worldwide a few days later.

Looking forward to 2017: Continued Consolidation and Focus on Niches
Sometimes this industry can be so unpredictable, this is hard! The consolidation trend will continue, as major actors from the hospitality industry gobble up startups to sell more of their properties directly to guests. We saw it with AccorHotels and Onefinestay, also with Wyndham and Wimdu. Direct bookings will be a hot topic for medium-sized property managers who will need to focus more than ever on niches, either geographic or thematic (e.g. MisterBnb).

 

Andy McNulty

Guest Hook
Actually I don’t think there have been any real surprises this year! That’s not to say there haven’t been changes, of course. From HomeAway’s new CEO to more guest-centric tools like Airbnb’s new Trips release. All of these changes are pretty big deals, but not necessarily surprising as the industry continues to stretch and innovate. (Or perhaps we’ve all simply adjusted our idea of what constitutes surprise in 2016. See Brexit in the UK and Trump’s election in the US!)

In 2017, we’re moving towards greater consolidation of property managers.
With the growth of national PMs like TurnKey and Vacasa, it’s a contentious area, for sure! Some would argue that the guest experience improves as PMs are able to offer greater consistency of service across markets. Others would counter that we lose a sense of the personal touch, something that has been the foundation of great vacation rental experiences in the last 20 years!

 

Andrew McConnell

Rented.com
Biggest Surprise: The scale and pace of the convergence and consolidation.
At Rented.com, we predicted a convergence and consolidation in the space but we thought it would happen over a longer time period. At the beginning of the year we saw hotels invest in the space. And as a result, through Accor’s purchase of onefinestay, we saw they’ll actually take ownership within it. Later, in the back half of the year, we saw 9flats, Wimdu, and HouseTrip all get rolled into bigger companies. These sorts of moves all within a single year, that surprised us.

New Markets will be the new trend. From what we at Rented.com are seeing from our customers, the biggest trend in 2017 will be the expansion of property managers and vacation rental managers into new markets.

It may be bigger companies buying smaller ones, like what Vacasa, Wyndham, and Vacation Rental Pros are doing. Or it could be traditional companies breaking into new vacation rental markets, adjacent to their existing ones. Or, what actually seems most likely, traditional vacation rental managers will take on the Airbnb side of the market and test the waters in more urban environments. Whichever the case, 2017 will be less about the new companies popping up in the industry than about the companies that are doing well expanding their footprint.

 

Chad Brubaker

OneRooftop
Who will rule distribution?
One of the more surprising happenings in 2016  was the disappearance of LeisureLink.  We were excited about the rise of another potentially successful aggregator of channels, especially since LeisureLink had previously reported that they’d be releasing a public API.  That would have made the passage of booking information much simpler, even to and from the likes of Airbnb and Homeaway.  There is definitely a trend for vacation rentals to market more similarly to how hotels distribute their availability; strategically amongst a wide variety of OTAs. While the shift towards more connectivity and a more hotel-like ecosystem wasn’t surprising, what was surprising was how up for grabs the spots for who become de-facto leaders of channel distribution remain.

Instant bookings shine a light on old problems. We all know that instant bookings are in the best interest of most channels and OTAs. However, it was a surprise to see that human rights came to the forefront of the conversation. In 2016, it was reported that cancelled bookings within Airbnb could prove — with statistical significance — that racial profiling was taking place within the home-sharing space.  NOT GOOD.  I commend Airbnb for promoting this to the forefront of the conversation around screening.  Discrimination has no place in the vacation rental space.  This is a difficult topic because we all know that some level of screening is definitely apropos. That said, we need to be careful about what this really translates into.

The vacation rental tech hype might be spilling into real estate.  There may be a bit of a bubble on the real estate investment side of the vacation rental space.  We predict that this will continue bubbling up and could potentially pop in the next year or so.  There have always been very lucrative vacation rental real estate investment opportunities out there, but a lot of guess work and quick moves could hurt those who didn’t do their research.

Want to stay strong in 2017?

OneRooftop has many expectations for the coming year. Read more predictions for 2017 and learn what you can do to keep your vacation rental marketing strong. OneRooftop saw up close what hundreds of vacation rental pros did this year. As the industry grows and develops, your nimbleness as a small business will be your strength.

Read OneRooftop’s Annual Report

vacation-rental-software

Click image to view OneRooftop’s 2016 annual report.

 

Leave a Reply

Your email address will not be published. Required fields are marked *