The introduction of Vrbo’s One Key loyalty program as part of Expedia Group’s overarching strategy brings significant implications for the vacation rental platform. As a brand within the Expedia Group, Vrbo is now poised to offer its guests and property owners a comprehensive and seamless rewards experience, setting it apart from competitors and driving long-term customer loyalty. With the ability to earn and redeem rewards across multiple Expedia Group brands, guests will enjoy greater flexibility and convenience when planning trips. At the same time, property owners may benefit from increased visibility and bookings.
In this article, we will explore the One Key loyalty program, its implications for Vrbo guests and property owners, and how it contrasts with competitor loyalty programs, such as those offered by Airbnb and Booking.com. By delving into the details of this game-changing loyalty program, we can better understand its potential impact on the travel industry and Vrbo’s competitive advantage.
I. What is One Key?
One Key is a new, comprehensive loyalty program launched by Expedia Group. It aims to integrate and streamline rewards across multiple Expedia Group brands, providing a seamless experience for customers.
B. Unifying Existing Programs
One Key brings together four existing loyalty programs – Expedia Rewards, Hotels.com Rewards, Orbitz Rewards, and eBookers Bonus+ – to offer a consistent and unified rewards experience for customers.
C. Inclusion of Brands without Previous Loyalty Programs
For the first time, brands like Travelocity and Vrbo, which previously did not have loyalty programs, will now participate in One Key. This expansion allows customers to earn and redeem rewards across a broader range of travel services and accommodations.
D. Participation of Most Expedia Group Brands
All Expedia Group brands will participate in the One Key loyalty program, including internationally recognized brands such as eBookers from the UK and Wotif from Australia. This inclusion ensures that customers can benefit from the loyalty program regardless of their location or preferred booking platform.
E. Earning and Redeeming Rewards
Members can earn One Key Cash, a form of rewards currency, across multiple Expedia Group brands. This allows them to accumulate rewards faster and provides more flexibility in redeeming rewards for various travel bookings and services.
F. Tier System
One Key features a tier system with four levels – Blue, Silver, Gold, and Platinum – offering increasing benefits and perks as members progress through the tiers. This encourages customer loyalty and repeat bookings with Expedia Group brands.
G. Earning Rates for One Key Cash
Members will receive 2% in One Key Cash for every dollar spent on eligible hotels, vacation rentals, activities, packages, car rentals, and cruises, and 0.2% in One Key Cash for every dollar spent on eligible flights. This reward structure allows customers to earn rewards on a wide range of travel bookings and services, further incentivizing them to choose Expedia Group brands for their travel needs.
II. Expedia Group’s Strategy and Potential Challenges with One Key
A. Why Expedia Group is launching One Key
Expedia Group is launching One Key to achieve several key strategic objectives:
- Strengthen customer loyalty: By offering a comprehensive loyalty program that spans multiple brands, Expedia Group aims to build a stronger emotional connection with customers, incentivizing them to continue booking through their platform.
- Increase cross-brand engagement and bookings: One Key encourages customers to book different travel components such as flights, hotels, vacation rentals, and car rentals through multiple Expedia Group brands, driving up overall bookings and revenue.
- Encourage long-term retention of high lifetime value members: Expedia Group believes that investing in loyalty programs can lead to better retention of high-value customers, which in turn can significantly boost gross profit and repeat business.
B. Potential Challenges in Deploying One Key
Despite the potential benefits, deploying One Key may come with challenges, particularly as Vrbo still needs to migrate to Expedia Group’s tech platform.
- Platform migration glitches: In the past, Hotels.com experienced glitches during its migration to the Expedia Group platform, which suggests Vrbo could face similar issues. To ensure a smooth transition, it will be crucial for Vrbo to learn from the experiences of its sister brands and take proactive steps to minimize any negative impact on guests and property owners.
- Coordinating multiple brands: Ensuring seamless integration and cooperation among Expedia Group’s various brands might prove to be a challenge. One Key aims to bring together different loyalty programs and brands under one umbrella, which may require significant coordination efforts and alignment of goals.
- Balancing the needs of Vrbo guests and property owners: As One Key is implemented, Vrbo must consider the distinct needs of both its guests and property owners. The loyalty program should provide incentives for property owners to participate, while also offering guests appealing rewards and opportunities to earn points. Striking the right balance will be critical for the program’s success.
- Communicating the value proposition: With the introduction of One Key, Expedia Group and Vrbo must effectively communicate the benefits of the loyalty program to their customers. This will involve clear messaging and marketing efforts to ensure customers understand the advantages of participating in the program and feel motivated to engage across multiple brands.
III. Implications for Vrbo Guests:
A. Enhanced Booking Experience
With the introduction of the One Key loyalty program, Vrbo guests can expect a more rewarding booking experience. By earning and redeeming OneKeyCash across multiple Expedia Group brands, guests can take advantage of the extensive range of travel services offered by Vrbo, Expedia, and Hotels.com.
B. Feeling of Connection with Expedia Group
Vrbo guests will now feel that Vrbo is not an isolated platform but rather an integral part of the Expedia Group. This sense of connection can increase trust and encourage guests to book other travel services, such as flights and car rentals, within the Expedia Group ecosystem.
C. Simplified Trip Planning
After booking a vacation rental on Vrbo, guests can conveniently book their flights on Expedia and rent a car through the same platform, simplifying the trip planning process. The One Key program makes it easy for guests to manage all their travel bookings under one loyalty umbrella, providing a seamless and cohesive experience.
D. Tailored Benefits and Perks
Depending on the membership tier, Vrbo guests can enjoy a variety of tailored benefits and perks that cater to their specific travel preferences. From priority customer service and exclusive offers for Silver Tier members to room upgrades, early check-in, and personalized travel assistance for Gold and Platinum members, One Key provides a unique and customized travel experience.
E. Encouragement of Repeat Bookings
As guests accumulate OneKeyCash and progress through the membership tiers, they are incentivized to continue booking with Vrbo and other Expedia Group brands. This encourages repeat business and fosters long-term loyalty among Vrbo guests.
F. Seamless Integration with Expedia Group
The integration of One Key across multiple Expedia Group brands ensures that Vrbo guests can enjoy a seamless and consistent reward experience. By allowing guests to earn and redeem OneKeyCash on a variety of travel services, the program offers unparalleled flexibility and convenience, setting it apart from competitors and enhancing the overall travel experience for Vrbo guests.
G. Competitive Advantage in the Travel Market
As more travelers prioritize loyalty programs when choosing their accommodations and travel services, Vrbo’s One Key program can provide a competitive advantage by attracting and retaining customers who are seeking a rewarding and comprehensive loyalty program. This can help Vrbo further differentiate itself in the crowded travel market and maintain a strong position among its competitors.
IV. Implications for Vrbo Property Owners:
A. Increased Visibility and Bookings
With the introduction of the One Key loyalty program, Vrbo property owners can potentially benefit from increased visibility and bookings. As guests become more loyal to the Expedia Group and its brands, they are more likely to choose Vrbo properties for their vacation rental needs.
B. Access to a Larger Customer Base
As One Key is integrated across multiple Expedia Group brands, Vrbo property owners gain access to a larger customer base of loyal travelers. These guests, who might have previously booked with other platforms, may now choose Vrbo due to the attractive rewards offered by the One Key program.
C. Enhanced Guest Experience
Vrbo property owners can take advantage of the various benefits and perks offered to guests through the One Key loyalty program. By providing guests with an enhanced experience, property owners can increase guest satisfaction and encourage repeat bookings, ultimately benefiting their businesses.
D. Competitive Advantage
The introduction of the One Key loyalty program can provide a competitive advantage for Vrbo property owners, as it differentiates Vrbo from other vacation rental platforms that may not offer comprehensive loyalty programs. This can help attract guests who prioritize loyalty programs when choosing their accommodations.
E. Limited Information
While the One Key loyalty program has been revealed, there is still limited information available on the specific implications for Vrbo property owners. As more details emerge, property owners can gain a better understanding of how the program will impact their business and take advantage of any potential opportunities.
F. Potential for Future Enhancements
As the One Key program continues to evolve, Vrbo property owners may see additional enhancements and benefits tailored to their needs. This could further strengthen the relationship between Vrbo and its property owners and lead to even greater benefits for both parties.
VI. Contrasting One Key with Airbnb
A. Expedia Group’s Emphasis on Loyalty
Expedia Group is focusing on long-term retention of valuable customers through loyalty programs like One Key. Their strategy involves investing in and retaining high lifetime value members, which has shown accelerating improvement across the business. In contrast, Airbnb has opted to not create a loyalty program, relying instead on the strength of their product and user experience.
B. The Impact of Loyalty Programs on Customer Behavior
According to Expedia Group, loyalty members drive twice the gross profit and repeat business over 18 months compared to non-members. Additionally, app users each drive 2.5 times the gross profit and repeat business over the same period. When these two groups are combined, with a loyalty member who also uses the app, it drives the highest production of all. This group represented the fastest-growing customer cohort for Expedia Group in 2022.
C. Airbnb’s Approach
Airbnb’s decision not to create a loyalty program sets them apart from competitors like Booking.com, Hopper, and Vrbo, which have already implemented their own loyalty programs. As Airbnb CEO Brian Chesky stated during the Q4 2022 results call, “the best loyalty program is building a product people love so much they want to come back. You don’t have to pay them to come back.” While loyalty programs can help retain customers, they can also be costly and take a toll on margins.
D. Differentiation in the Market
The contrasting approaches of Expedia Group and Airbnb highlight the differing strategies within the travel industry. Expedia Group’s One Key program emphasizes rewarding loyal customers and incentivizing repeat bookings across its range of brands, while Airbnb focuses on creating an exceptional product that keeps customers coming back without the need for a formal loyalty program.
VII. Contrasting One Key with Booking.com’s Genius loyalty program
A. Scope of Rewards
One Key is a comprehensive loyalty program that covers multiple Expedia Group brands, including Vrbo, Expedia, Hotels.com, and others. It allows members to earn and redeem rewards on various travel bookings, such as accommodations, flights, car rentals, and activities. In contrast, Booking.com’s Genius program is focused solely on accommodations, including hotels and vacation rentals, without rewards for other booking types.
B. Tier System
One Key uses a tiered system (Blue, Silver, Gold, and Platinum), offering various benefits and rewards depending on the level of membership. Members can earn and redeem OneKeyCash across multiple Expedia Group brands, providing flexibility and choice for travelers. Booking.com’s Genius program also has a tiered structure, but it consists of three levels with discounts and perks tied to the number of stays completed within a two-year period.
C. Earning and Redeeming Rewards
In One Key, members earn 2% in OneKeyCash for every dollar spent on eligible bookings and 0.2% in OneKeyCash for every dollar spent on eligible flights. The rewards can be redeemed across Expedia Group brands, offering a seamless experience for travelers. In the Genius program, members unlock discounts and perks, such as complimentary breakfast and room upgrades, as they progress through the tiers.
D. Lifetime Benefits and Status Maintenance
One Key requires members to maintain their status by earning a certain number of OneKeyCash or completing a specific number of stays within a calendar year. In contrast, Booking.com’s Genius program offers lifetime benefits once a level is unlocked, without the need for ongoing maintenance of the status.
Overall, the key differences between One Key and Booking.com’s Genius loyalty program lie in the scope of rewards, the earning and redeeming process, and how membership status is maintained. One Key offers a more comprehensive rewards system across various travel booking types and Expedia Group brands, while Genius is focused on accommodation bookings and lifetime benefits for its members.
VIII. Contrasting One Key with Hopper’s Carrot Cash
Hopper’s Carrot Cash is a loyalty program that rewards users with credits for booking hotels, homes, flights, and car rentals prepaid on the Hopper app. While both One Key and Carrot Cash incentivize bookings and offer redemption options, the structure of the two programs and their expiration policies differ significantly.
Is One Key a game-changer for Vrbo?
In conclusion, the introduction of Vrbo’s One Key loyalty program as part of Expedia Group’s initiative brings numerous potential benefits for both Vrbo guests and property owners. As guests will now have the ability to earn and redeem rewards across multiple Expedia Group brands, they will have greater flexibility and convenience when planning trips. This interconnectedness emphasizes that Vrbo is an integral part of the Expedia Group, encouraging users to book vacation rentals and flights and car rentals through other Expedia platforms.
For Vrbo property owners, although details are still emerging, there is the potential for increased visibility, bookings, and customer loyalty due to the program. One Key’s integration within the Expedia Group brands may also lead to a more seamless experience for property owners when managing their listings and bookings.
By launching the One Key loyalty program, Vrbo and the Expedia Group set themselves apart from competitors like Airbnb, which has opted not to create a loyalty program. The move signals a strategic focus on long-term customer retention and growth, aiming to provide a comprehensive, rewarding experience for travelers and property owners alike. As the program unfolds, it will be interesting to see how it impacts the vacation rental market and the overall travel industry.