Austin, Texas has been atop my list of American travel destinations for the past five years. In Friday’s HomeAway Summit, I finally had a valid reason to head west to this Central Texas gem on the Colorado River. It’s been dubbed the “Live Music Capital of the World,” and it did not disappoint in that category. I was able to see Dave & Phil Alvin at the legendary Continental Club, which was walking distance from the VRBO unit where I stayed, and Austin Music Hall of Famer, Dale Watson, at Hole In The Wall.
Those at the Summit would categorize this trip as one of “bleisure” (business + leisure), but I’d prefer to call it anything but that awkward neologism. I was also able to meet with some Austin-based short term rental managers such as Turnkey and DEN STR, potential buyers in the rented.com wholesale rental marketplace. I was also able to network with other early stage companies such as Austin-based FloSports and Atlanta-based SafelyStay.
But the main goal of the trip was to learn about changes in the industry and with the HomeAway product.
Here’s a synopsis of what I learned:
HomeAway COO Tom Hale was permitted to say that he was “excited” about the pending $3.9B deal and the implications for HomeAway’s growth and innovation potential.
Unfortunately, that was the extent of the discussion.
Travel Trend Tidbits
There were myriad industry statistics presented, but I found a few particularly interesting. The category continues to grow with overall supply of and demand for vacation rentals increasing year-over-year. 89% of vacation home owners will rent their properties within the first 12 months of purchase. There is a shift in consumption to more millennial vacation rental guests, which has some important implications for the industry as their financial impact increases. Millennials consume vacation rentals differently in a few important ways. Millennials are four times more likely to travel in a group and about half as likely to travel with family as those over 35 years of age. That has obvious implications for vacation rental marketing as well as the markets to which they travel. They book units about 150 miles closer than those in the older cohort. HomeAway reports having more traveler demand for urban properties than they have supply. 62% stay 4 days or less versus just 41% of older travelers. Approximately 11% more millennials book within 30 days of travel too. 92% of consumers prefer online bookability and HomeAway is responding, which is a nice segue into the product updates.
The overarching theme of HomeAway’s pending and recent product changes is conversion, or the percentage of users who perform a desired action, which in this case is booking. They intend for all listings to be online bookable at some point in 2016, an imperative for properly tracking conversion. To increase conversion, HomeAway has changed the way search results function from static to dynamic results in what it calls “best match.” This is a major departure from past practices. Per the online listing site, “Best match is a sophisticated process that looks at traveler preferences as well as the booking experience a listing provides to place listings within search results. Listings are first placed within their subscription level (as applicable) in search results and then sorted based on the best match for the traveler and their search to optimize bookings for property owners and managers.” Pay-per-booking listings are sprinkled throughout search results. Those premium subscription listings that are online bookable, updated, and convert well are poised to fare the best under the new system. Another important change related to online conversion are new service fees, which are expected to be guest charges totaling approximately 6% of online booking charges.
Aside from trends, product changes, and a few product complaints, many owners expressed interest in two areas:
- Best practices for creating solid and consistent hospitality experiences to their guests, and
- Leveraging data.
Many owners were focused on investing more time and capital into creating great guest experiences. The Glad to Have You app by HomeAway was offered as a tool for streamlining communications and standardizing portions of the guest experience across different inventory and markets. With respect to data, owners expressed interest in everything from occupancy rates and average rental rates of comparable properties to dynamic pricing solutions, such as those provided by Everbooked and SmartHost. HomeAway admitted to having some pricing data-related product updates in the works but gave little guidance on timeline of the rollout.
With the Expedia deal and major product changes pending, the Austin Summit was certainly an interesting event to attend. HomeAway’s commitment to testing solutions designed to optimize online conversions was a highlight that will be interesting to track in the months to come. It is clear that the vacation rental industry becomes ever more data-driven, yet it remains to be seen how well individual owners and self-managers will be able to compete in such a world.
Did you attend the HomeAway Summit in Austin? Let us know what you thought in the comments below!