fbpx
vintory banner

The domination of Airbnb

Global listings growth Airbnb / HA

Looking back over the last few years since I wrote the first Holiday Rental Mastery stories, it is clear that several things have changed radically.

Airbnb domination

Airbnb, the big Gorilla has continued to rampage in the vacation rental market. Back in 2015 I admired its simplicity and its 6 layers of trust. Others thought it would peter out. I predicted it would dominate the VR market, and it has.

At the time it was downplayed by the Homeaway/ Stayz folks who claimed they dominated the market and that Airbnb was a temporary surge driven by millennial adventurers.

Fast forward to 2018, and reversal is complete. Airbnb is still growing at a jaw-dropping rate – the 100% growth year on year in Australia is typical around the world in recent years but it is slowing. It has long left Homeaway behind. Here is a curve of its exponential global growth, averaging 40%+ globally in recent years.

Global listings growth Airbnb / HA
Global listings growth Airbnb / Homeaway

Drift to the Airbnb model.

The second change is competitors are drifting towards the Airbnb model.

I’ve just come back from the Sydney 2018 Rezfest conference hosted by Homeaway. It was a good look under the hood at the new Homeaway model. The old subscription/ commission hybrid is gone. The new global model with traveller fee is very close to a copy of Airbnb.

Tripadvisor has also drifted to a copy of the Airbnb model of low commission and high traveller fee.

Although the Homeaway software is still clunky compared to Airbnb, it is improving fast and may catch back up a bit in the next year or so – as you would expect when the resources of the Expedia giant parent are set onto the task. One example is the win/ loss card system, which helps owners understand their competitiveness for each booking won or lost.

In a future post I will compare the big four OTAs that dominate the vacation rental industry. Airbnb, Homeaway, Booking.com and Tripadvisor.

What does big company domination mean for VR owners?

The explosive growth of Airbnb and to a lesser extent Homeaway means that in many markets the number of competitors has doubled or tripled! Vacation rental properties that once dominated their markets are less booked, with lower occupancy.

The relentless drive by Airbnb to decrease prices and thereby grow the number of interested renters has pushed prices and margins down generally.  Your fabulous VR can be flattened into just another commodity in a market controlled by the big Online Travel Agencies.

So what can Vacation Rental owners do?

Small owners have the advantage of customer intimacy that the big companies can only ever dream of. Our Sea Zen and other VRs like it are proof to show that you can survive in a hard market and even thrive.

Your customer intimacy advantage

What do I mean by customer intimacy?  We can speak with our guests after booking.  If we are on site we can physically meet them, help them, and become a real person with a real if fleeting relationship.  During their stay we may, without intruding, ask if there is anything we can do to help their stay.

After they stay we can ask for their opinion about their stay, even suggest they refer us to friends.  We can also tell them that as a past guest they will get a special direct booking discount, and get our informative newsletter.   What large travel company can do any of this? We truly have an unfair advantage of intimacy!

Small owners can also use several strategies to succeed by:

  • Standing out from their competitors to get more bookings
  • Taking advantage of that guest intimacy via a newsletter and loyalty scheme to get their past guests to return.
  • Optimising their listings with the big companies
  • Using their own website to get more bookings

In coming newsletter articles, we will zero in on ways you can succeed in this tough environment.  The next post will be on Standing Out

Rex Brown
Holiday Rental Mastery
Helping Vacation Rental owners get ahead of the competition.

PS if you think a colleague can benefit from this, please share with them

Share:

Facebook
Twitter
Pinterest
LinkedIn

3 Responses

  1. Thanks for all your tips and for sharing your knowledge and experiences.
    Debe

  2. Great to hear from you again Rex. I enjoyed meeting you again at Rezfest.
    Fleur

  3. It’s good being part of a growing movement of active owners, a lot to share.

Comments are closed.

My name is Rex Brown. I live in Australia, on the Great Ocean Road in Victoria. I run two of my holiday rentals here on the coast, and another in inner Melbourne . They are all quite different, but they all run at high occupancy. They are the sandpit that I play in, running constant experiments about what works and what doesn’t.

scaler

Table of Contents

Dear Short-Term Rental Industry Member, Join Our Scalers Network

Our Mission

We bring together short-term rental industry members to create valuable business and personal relationships. With the support of vetted peers, you can deliver on your next individual project goals faster, work in private groups to share doubts and successes, and become a new voice that shapes the conversation about our industry.

Whether you are a property manager, an owner, an industry vendor, a listing site operator, an investor, or a consultant, you can become a member of our Rental Scale-Up family.  As property managers and industry vendors may not have the same needs, some of our activities work by affinity groups. For instance, we have one version of the mastermind group sessions reserved for property managers and owners, and another one for vendors and listing sites. This way, you get feedback from peers who understand your pains and can get you faster to getting results.

1. Action, Transformation & Results

  • Mastermind Group for Property Managers & Owners: A mastermind group is a group of peers who meet to give each other advice and support. Facilitated by Rental Scale-Up. One session every 2 weeks with your group for a least 3 months.
  • Ask a Property Manager: Hosts, owners and property managers benefit from the experience of a successful property manager. (1 per month)
  • Groupwork: Report of the month co-creationA group of Scalers volunteer to write a report on the topic of the month. The result is published on RentalScaleUp.com, with full credits to each participants. (1 per month)
  • Mastermind Group for Industry Vendors & Listing Site Operators: A mastermind group is a group of peers who meet to give each other advice and support. Facilitated by Rental Scale-Up. One session every 2 weeks with your group for a least 3 months.
  • Ask an Expert Anything (for vendors and listing sites): An outside expert (e.g. a copywriter) shares their experience on a topic in an Ask Me Anything (1 per month)

2. News & Live Discussions

  • Investment & Deals  Discussion: Thibault and an M&A specialist/VC go over recent deals, M&A, investment rounds. Live, monthly.
  • Curated news: Save time. We read the news for you, curate the articles, and add our exclusive comments (weekly, in the Network Newsletter)
  • US Trends & Data Discussion: We analyze AirDNA’s latest report on US trends and zoom in on key markets (e.g. urban vs vacation rental markets).  Network members share what they see in the markets. Live, monthly.
  • Monthly Live online conference: Every month, our Network deep dives into a topic that is crucial to the short-term rental industry. 3 experts share their insights, best practices and answer your questions live.
  • European Trends & Data Discussion: We analyze AirDNA’s latest report on European trends and zoom in on key markets (e.g. UK, France, Italy, Spain).  Network members share what they see in the markets. Live, monthly.
  • Weekly Teardown with Thibault: Rental Scale-Up founder tears down one business news, every week, live.  Networker members share their views. No filter.

3. Facilitated Networking

  • Networking Booster: Meet new business partners and improve your networking game at an online event. Our team facilitates the event to make it easy for you to connect with your peers. (monthly)
  • Business Profile: Each new Scaler gets their profile featured in a dedicated article on RentalScaleUp.com. Get more visibility and authority.
  • In-Person Meetups: We meet in real life, either during a large vacation rental conference or in a city of our choice (quarterly)
  • Job Offers: Network members can not only see job offers but also post theirs. If desired, job offers can be extended to all Rental Scale-Up readers (free and paid).

4. Deals on industry software and products

  • Get Discounts: Enjoy exclusive deals brought to you by fellow Network members. Only in our Deals section. Monthly.
  • Offer Deals and Discounts: Network members may offer exclusive deals to fellow members, from discounts on stays at their properties to lifetime deals on vacation rental software. Only in our Deals section. Monthly.

Ready to join right now?

Scalers comes in 3 levels:

  • Scalers Insights, the limited, content-only version of the network. Great those who just want to get the insights but have less time for business transformation.
  • Scalers Network: Transform your business and get results. Get more things done. You get support, accountability, networking, training, and investment opportunities
  • Scalers Network+ : Avoid the hassle of quarterly payments and pick an annual membership. Qualify for bonuses good for your business (e.g. lead generation)

Not quite ready? Sign up for our free newsletter

Weekly insights straight into your email inbox.

On Key

Related Posts

airbnb 2022 summer release update

Airbnb 2022 Summer update release

On May 11, Airbnb will release its 2022 Summer update. Here’s what we can expect from it, as hinted by Brian Chesky, the company’s CEO and guessed by our Rental

Actionable insights

Take the Right Decisions for Your Rental Business thanks to our Weekly Industry Brief.

Exclusive newsletter for rental entrepreneurs.