trends in vacation rentals

Trends In Vacation Rentals in 2015

As websites devoted to renting out vacation properties continue to pop up and grow and other trends in the industry make it easier for people to find and stay at vacation homes, vacationers have been booking fewer hotel rooms than ever before.

From technological advances that make it dead easy to communicate and coordinate with your renters (like our rental automation platform), to increased amenities and experiences provided by the property owners, to sites like Airbnb empowering people to rent out their own properties, there have been a lot of changes in the past few years — and for the most part, changes for the better. After all, growing the industry benefits everyone who is a part of it.

Here are two changes with major implications that we’ve noticed lately:

Priceline moves towards vacation rentals

The biggest piece of news is one you may have heard: Priceline is getting into vacation rentals, the CEO Darren Huston said on an earnings call in August:

“This quarter we began experimenting with self-onboarding of individually owned vacation rental properties—subject of course to a set of quality checks on our side and the ability of the property to be instantly bookable. We already have an encouraging pipeline of vacation rental properties to activate via this channel. We’re hopeful this functionality will help us scale our property acquisition even further.”

Priceline-owned and already handle vacation rentals, which are growing 39% a year. So this news is a natural result of that, it seems. Priceline has been making moves in the hotel industry for a while now, probably as a response to Expedia’s growing empire and their recent acquisition of Travelocity.

Huston said they are approaching this as more of an e-commerce platform, “just trying to create it ultimately like booking a hotel.”

It seems that Priceline isn’t afraid to experiment and move into other areas to remove the pressure on their main business model. In fact, just this week, they announced that they are teaming up with TripAdvisor to use their instant booking platform. Two of the biggest names in travel teaming up? Expect them to make some waves.

This ends up being great for vacation rental owners because it’s one more platform to gain exposure on. Priceline is a massive website with millions of visitors each month—that’s a lot of eyes to get your listing in front of.

Rental fees are getting out of hand

One aspect of vacation rentals that’s been getting a lot of attention lately are rental fees: because they are getting more and more ridiculous. Rental fees are an obvious part of renting out a vacation property, but vacation rental managers have been getting a bit heavy-handed with them recently.

We all expect a cleaning fee—that’s no problem. The problem is when managers start charging for things like hot tub fees, parking fees, and generally just piling on one fee after another: convenience, check-in, booking fees, and so on. And it seems to be getting worse. (Vacation Futures) CEO Andrew McConnel explains that “Rental managers only get a commission on the rental part of the transaction, but most negotiate that they get to keep 100% of the fees. In this way they can make owners think they are getting a great deal with lower commission, but actually take more of the all-in revenue by shifting more of the revenue to other fees.

Overall, it’s not a good trend for property owners. Customers feel deceived, and it’s bad business, plain and simple. In general when we are looking to book a hotel room or vacation rental, we go for the lowest listed price. But those fees add up—especially if they aren’t explicitly listed—and customers end up paying more. Because we tend not to notice fees, it doesn’t matter in the short-term, but say goodbye to repeat customers.