August 7, 2015
Is 2015 the Vacation Rental Industry’s 1952 Moment? (Part 2: Vacation Rentals Today)
What many think of today as the big “brands” of the vacation rental space are in reality actually listing sites that are similar to online travel agents like Priceline or Expedia, for instance.
Such online marketplaces allow consumers to find anything and everything easily from the comfort of their own computers, from a spare couch to a castle to a country as Airbnb has highlighted in the past. (For the record, I’m referring here to when Airbnb formed a partnership with the Principality of Liechtenstein in 2011 alongside several German and Austrian villages, and one could literally rent a country or village).
However, while these online marketplaces exist, they are not brands of inventory or even experiences, but instead are sources of it aggregated on technology platforms. In the vacation rental market, the true brands of inventory that do exist tend to be very localized vacation rental managers, who almost define a cottage industry. When we look at whom these local brands of vacation rental managers are we see that they tend to have 50 or fewer properties and all of these properties are generally located in one specific geographical region. They are, in essence, small companies with local economies of scale who could be far more efficient if they partnered with the right parties in other geographies.
Such local managers with large inventory of rental properties often know and can serve their specific market very well, but their work is not transferable easily to other geographies because of marketing and geographic coverage. For instance, take a homeowner who uses a vacation rental manager to rent her home in Destin, Florida, a beach vacation hotspot, but then buys a house in Aspen, Colorado, a ski resort area. That homeowner may have a wonderful relationship with their Florida vacation manager, but that relationship will not be transferrable to Aspen primarily given geography. Now, she must start her research all over again to find a management company that she trusts in a geography that is new to her and go through onboarding as a homeowner with that company.
On the renter side of the equation, the same is true. A vacationer who loved his rental experience via a manager in Cape Cod must find a new manager to rent from for his next trip to La Jolla. Both homeowners and renters will benefit from the growth and consistency of the vacation rental management space, just as guests benefitted from the consistent hotel experience started by Conrad Hilton and Kemmons Wilson.
To read the next part in this three-part series, visit:
Part 3: The Future of Vacation Rentals