During an exclusive conversation at the bustling Short Stay Summit on April 24, 2024, at Old Billingsgate in London, we sat down with James Cassidy, Sr. Director of Partner Success at Vrbo, part of the Expedia Group, to pull back the curtain on what lies ahead for the prominent vacation rental platform in 2024.
This deep dive reveals not just Vrbo’s top-performing markets but also unpacks the real story behind the discontinuation of its Boost program and its current strategic replacement. Moreover, we spotlight the emerging trends that could significantly impact how property managers optimize their listings and strategies in the coming months. Vrbo’s representative also addresses the recent technical woes that the platform went through and announces major changes to the Owner Dashboard in the near future.
What is Vrbo’s strategic focus for 2024?
A Loyalty Leap: Introducing ‘One Key’ to the UK and Beyond
While competitors tread water on the loyalty front, Vrbo is charging ahead with the international rollout of its ‘One Key’ loyalty program. Initially launched in the U.S., the program is now poised to capture hearts in the UK by summer 2024, as suggested by us, bringing a unique value proposition that promises to keep travelers within the Expedia Group’s ecosystem.
‘One Key’ is a loyalty initiative designed to harmonize the booking experience across Expedia Group’s vast network, which includes Vrbo, Hotels.com, and Expedia itself. The program allows travelers to earn points (“earn”) and use them for discounts and perks (“burn”) seamlessly across these platforms, fostering a unified brand experience that encourages repeat bookings and enhances customer satisfaction.
The program’s U.K. launch is especially significant considering Airbnb, a primary rival, has yet to introduce a comparable loyalty program. Vrbo’s approach not only differentiates it from Airbnb but also strategically positions it to capture a greater share of the market by appealing to a base of engaged, return customers. James Cassidy emphasizes the importance of this rollout:
“It’s about creating an interconnected ecosystem where loyalty pays back both the traveler and the platform.”
For property managers, this move signals a shift towards greater traveler retention and enhanced booking potential. Cassidy’s advice? Leverage this integration to appeal to a base of loyal, returning customers who are already tuned into the Expedia network’s frequencies.
Driving Adoption of Advanced Features
Another strategic priority for Vrbo in 2024 is the continued enhancement of its platform through the consolidation of its traveler interfaces. This includes driving the adoption of flexible seasonal cancellation policies and the promotion of long-term booking discounts. These features allow property managers to adjust their cancellation terms during off-peak seasons to attract more bookings, while also providing incentives like weekly and monthly discounts to encourage longer stays.
These enhancements are designed to offer property managers greater flexibility and to incentivize extended stays with discounts, aligning with changing traveler preferences for longer, value-driven vacations.
What does the latest Vrbo booking data suggest about travel trends for 2024?
Price Sensitivity and Value
The demand for competitively priced accommodations continues to dominate traveler preferences, as indicated by the latest Vrbo booking data. “Price sensitivity has returned as a dominant factor in travel decisions, making competitive pricing strategies more important than ever,” Cassidy explains.
Post-COVID, while travel corridors have reopened and normalized, the pricing in many domestic markets remains high, potentially outstripping demand. This presents a challenge and opportunity for property managers to recalibrate prices to remain competitive, especially in non-urban UK destinations where prices soared during the pandemic.
“Our focus remains sharply on value—from dynamic pricing tools to seasonal discounts,” Cassidy stated. With over half of travelers prioritizing budget-friendly options, Vrbo’s approach is clear: adapt pricing to meet evolving consumer expectations, particularly in post-pandemic landscapes where inflated rates are the new normal.
Sustainable Travel
Sustainability is increasingly influencing traveler choices, with a significant majority expressing a preference for environmentally friendly travel options. The latest Booking.com Sustainable Travel Data survey involving over 31,000 travelers from 34 countries indicates that 83% of respondents consider sustainable travel important, and 75% express a desire to travel more sustainably in the coming year, underscoring a clear mandate for the travel industry to prioritize and facilitate more eco-friendly practices.
In response to this growing traveler conscientiousness, Vrbo has taken steps to ensure that its platform supports and promotes sustainable travel, making it simpler for partners to highlight 37 sustainable amenities in their listings. This allows travelers to easily identify and choose accommodations that align with their environmental values, enhancing customer satisfaction and potentially increasing bookings for those properties that boast eco-friendly features.
While Vrbo encourages the listing of sustainable amenities, the platform currently stops short of implementing its own sustainability badging system. This decision likely reflects a broader caution in the industry, illustrated by Booking.com’s recent experience. Booking.com faced criticism for its sustainability badging, leading them to pivot towards showcasing accommodations with third-party environmental certifications instead.
This transition plays well with broader regulatory and consumer demand for more substantial, verifiable actions against environmental claims, particularly in light of regulations like the EU green claims directive, which seeks to prevent misleading claims about environmental impacts.
When questioned about whether Vrbo might adopt a similar approach to third-party certifications, Cassidy indicated that it is a consideration for the future. “Expedia already has third-party certifications on the Expedia branded websites, and we’re evaluating the best approach for Vrbo,” he explained.
Embracing the Shift Towards Extended Stays
The remote work revolution has significantly altered the landscape of travel, with more travelers seeking accommodations that support longer stays. Vrbo is responding to this trend by enhancing its offerings to cater to the needs of remote workers and others who prefer to stay longer than the traditional vacation period.
To capitalize on this shift, Vrbo encourages property managers to implement weekly and monthly discounting strategies. Cassidy recommends a minimum of 10% discounts, observing that “we see discounting levels much higher at the monthly discount level.”
These discounts serve as a primary lever to attract guests looking for longer-term accommodations, aligning with the benefits remote work arrangements offer. By adopting such discounting practices, property managers can increase their appeal to a growing segment of the market that values both the flexibility and cost-effectiveness of longer stays.
Leveraging Local Expertise for Personalized Experiences
In a world where personalized experiences are becoming the norm, Vrbo is equipping property managers with tools to offer highly customized stays. Property managers’ local knowledge is a significant asset, as they often possess an intimate understanding of their locations, providing them with a unique opportunity to enhance guest experiences.
One of Vrbo’s key tools in facilitating personalized experiences is the welcome guide. This guide is highly valued by travelers, with Cassidy highlighting its popularity: “The welcome guide when it’s there is used by over 80% of travelers.” Despite its effectiveness, the feature remains woefully underutilized.
Which Vrbo markets are performing best, and which are growing fastest?
Spotlight on Europe: Events Driving Demand
2024 is shaping up to be a landmark year for Europe in terms of events, with several high-profile happenings poised to draw massive crowds and significantly impact travel trends. James Cassidy highlighted the array of events that are transforming the landscape for vacation rentals: “It’s a big year for events in Europe. You’ve got the Paris Olympics, the Euros in Germany, the UEFA Champions League in London, and even Taylor Swift coming to town.” These events are not only cultural and sports milestones but also golden opportunities for vacation rental markets in the host cities.
With such events, there’s an inherent peak in demand, which presents a unique window for property managers to refine their pricing strategies to maximize earnings. Cassidy notes, “When there’s a peak in demand, there’s a pricing strategy opportunity.” Property managers should consider flexible pricing models that capitalize on these high-demand periods. Additionally, these events offer a strategic opportunity for the acquisition of new properties, allowing managers to expand their portfolios in locations with proven high demand.
Top Performing and Fastest Growing Markets
Vrbo’s booking data from Q4 2023 reveals that certain cities have surged as top destinations, including:
- Paris and Gérardmer, France
- London, UK
- Rome, Italy
- Frankfurt, Berlin, and Norderney, Germany
- Malaga and Adeje, Spain
- Albufeira, Portugal
This diversity in destination popularity suggests a robust interest in both urban and scenic or resort locales.
For property managers operating in or considering expanding into these high-performing markets, there are several strategic moves to consider:
Event-Driven Marketing: Tailor marketing efforts to highlight proximity to major events and the unique benefits of choosing a vacation rental over traditional hotel accommodations.
Dynamic Pricing Tools: Implement pricing software that responds in real-time to changes in demand, particularly during major events, to optimize rental income.
Enhanced Guest Experiences: In markets with high competition, differentiating offerings by enhancing guest experiences can significantly boost attractiveness. This can include anything from offering event-specific amenities (like guides or transportation options to event venues) to ensuring high-speed internet for business travelers in town for events.
New Tech Horizons: Vrbo’s Platform Migration Woes and Evolution
Overcoming Tech Migration Challenges
Vrbo’s journey to migrate its tech onto the Expedia platform has been both ambitious and fraught with the complexities typical of large-scale tech consolidations. “Tech migrations are not new to us… They’re big projects, there’s a lot of work involved,” Cassidy shares, alluding to how previously Vrbo operated under the HomeAway brand and underwent a significant transformation as it integrated 24 acquired websites into one unified tech stack.
The initial rollout did face its share of challenges, including bugs and integration issues, which impacted the user experience for both travelers and property managers. Addressing these issues has been a priority post-migration, with Vrbo focusing on “smoothing out any bugs of those big project programs and completing the rollout of the migration.”
Better Support Structures for Property Managers
To mitigate the transition challenges faced by property managers, Vrbo has significantly ramped up its support mechanisms. Cassidy outlines the proactive measures taken: “Both the service and the account management teams have been providing support to partners, property managers, and hosts throughout the process.” By enhancing AI chat and human-powered support options, Vrbo ensures that any issues are quickly addressed, maintaining high service standards even during periods of significant backend changes.
Additionally, Vrbo’s premier host partners receive specialized service, ensuring they continue to provide exceptional traveler experiences even amidst backend changes.
Future Plans for the Owner Dashboard
The next phase in Vrbo’s tech evolution involves migrating the Owner Dashboard to Expedia’s technology. This migration will carefully preserve the features specifically tailored for vacation rentals, acknowledging the different needs compared to hotel management – something we have previously noted in our analysis of Vrbo’s broad-level strategy.
“The owner dashboard will retain those VR-specific features and functionality,” Cassidy confirms, illustrating Vrbo’s commitment to maintaining the unique aspects of vacation rental management within a more robust technological framework.
Looking forward, Vrbo remains committed to simplifying its technology to expedite the release of new features across multiple brands within the Expedia Group, ensuring that Vrbo remains a competitive force in the vacation rental market.
Streamlining for Efficiency: The Evolution of Vrbo’s Premier Host Program
Phasing Out the Boost Program
Vrbo has made a strategic change in how it supports and rewards its top-performing hosts by discontinuing the Boost program, a decision reportedly driven by direct feedback from property managers.
The Boost program was originally designed to enhance the visibility of properties managed by Premier hosts through a system of boost points that could be manually applied to improve property rankings on the platform. However, Cassidy shares that the manual nature of the program became a significant time investment for property managers, particularly those managing large portfolios.
James Cassidy explained the rationale behind the decision, noting that “the partner feedback in relation to the Boost Points program was, I love the fact that I can boost the ranking, the visibility of my properties. I don’t really love the fact that it’s manual and it takes me a lot of time.”
Acknowledging the operational burden this placed on managers, Vrbo opted to automate the process, integrating the rank boost directly for Premier hosts without the need for manual point application.
Cassidy added, “And so we took that feedback on board and we decided as per our company strategy of simplification is for Premier hosts, why don’t we just give them a rank boost for their properties and not require them to go through the effort of applying Boost points?“
The transition from a manual to an automated boost system has been met with positive feedback from the community of property managers. This change has allowed them to focus their efforts on other aspects of property management, enhancing overall productivity and satisfaction. Cassidy shared, “The feedback from Partners, very positive offer. Thank you for taking that work off my desk. I’ve got other things that I could be spending that time on.“
Maintaining Premier Host Status
The revised Premier Host program now automatically boosts the visibility of properties managed by hosts who achieve and maintain this status. This status is reviewed on a quarterly basis, ensuring that only those who continue to meet Vrbo’s standards of service and guest experience benefit from enhanced visibility.
