The accommodations market has expanded over the past decade, in part due to the growing vacation rental sector. However, nobody quite knows how vacation rentals will fit into the larger travel ecosystem – or, who will ultimately “own” the vacation rentals space.
Sharing economy platforms like Vacasa and Airbnb have helped vacation rental owners and management groups market their properties online, but relatively little has been heard (yet) from the Big Tech companies like Amazon and Google – both of whom have their ambitions set on travel – or from Big Brands like the travel management companies.
In the meantime, vacation rental websites have leveraged new technology to catch up and compete with hotels – and, in fact, hotel brands are buying vacation rental websites to eliminate the competition and seize the opportunity.
There’s no question that Vacasa or TurnKey are not Amazon or Google, and never will be. But therein lies the opportunity, challenge and advantage: a chance to rebrand niche vacation rental companies from warehouses of inventory into something more closely resembling hospitality brands.
Big Tech and vacation rentals
The vacation rentals sector is fast becoming its own player in travel technology, with its own innovators and a vertical-specific brand experience that rivals the hotel brands.
But if vacation rentals are to really take off as brands, it will have to be in the arenas of “hospitality” and “loyalty” and not just in booking schedules and housekeeping. This will save the industry from being just another inventory source or a mere vertical play for Amazon, Google or Marriott.
Before we dig into the unique opportunity for vacation rentals, we should clarify the role being played by these Big Tech companies and Big Brands. In a sense, they’ve made growth in travel possible through their search engines (Google), booking engines (Expedia, Marriott), cloud services (Amazon), social media platforms (Facebook) and now social messaging apps (WhatsApp, WeChat).
The quickest and most effective way for vacation rentals to create brand affinity is through third-party programs and partnerships.
Big Tech has connected the world and laid the “digital tracks” we all take for granted and use to make money. There can be no discussion about the future of travel without the Big Tech companies and other Big Brands (hotels, TMCs) having a seat at the table.
Among the biggest players are, of course, Amazon and Google. Google posted its first $100 billion year last year, while Amazon is already closer to $200 billion. Despite Google’s impressive portfolio of products and services, it has not yet found the revenue equivalent of Amazon Web Services or Apple’s hardware suite (i.e., new gifts that keep on giving). Google is still driven by search engine marketing, though it is competing with Amazon for the voice-controlled device market (Google Home).
Not surprisingly, these Big Tech battles have increasingly spilled over into travel. Amazon recently released Alexa for Hospitality, and Google is changing the booking game with Google Flights, which has a clean user interface and integrates with Gmail and other Google services. Google controls the online identities of more than a billion users who access the internet through their Google or Gmail accounts, plus the company has its Google Pay mobile wallet.
Ultimately, Google doesn’t have to become an online travel agency or compete with other OTAs – not really. OTAs have access to inventory, but this is something any website can get access to with the right partners. Google has access to inventory (and can buy more of it), plus a much larger global user base across any vertical it wants to target. Travel happens to be one of the most attractive sectors for the likes of Google and Amazon.
Vacation rentals are not competing at that scale or on that level, but neither are online travel agencies, airlines or hotels. The Big Tech companies are in a battle all their own, and all stakeholders in travel will have to learn to play together around those platforms.
The only way to compete with them is to learn how to use them, not to rival them. But when it comes to competition within the travel industry itself, vacation rental companies are as much “players” as anyone else – but only if they learn the rules of the digital marketing game.
Vacation rentals as travel industry brands
Now is the time for the Vacasas and TurnKeys of the world to build a user/customer base that appreciates vacation rentals as a unique offering and who will be loyal to travel brands that:
- Differentiate themselves around vacation rentals
- Offer a loyalty program, travel club or a similar value-add on top of their core vacation rental offering
Connected travelers both expect and deserve much more than just transactional booking, even for short-term vacation rentals. They expect a brand promise which, if met, translates into brand affinity, loyalty and, ultimately, brand equity for vacation rental brands.
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But these new brands will have to compete and add value outside the vacation rentals market, in the larger travel ecosystem (as Google, Amazon, Uber, Airbnb and others are doing).
The quickest and most effective way for vacation rentals to create brand affinity – without having the hefty budgets or resources of Amazon and Google – is through third-party programs and partnerships, such as loyalty programs and travel clubs, that can leverage software-as-a-service platforms and API integrations to connect vacation rentals to a larger travel ecosystem.
Remember, no travel brand is an island.
Travel and loyalty for vacation rental brands
Travel is an industry of intermediaries adding and capturing value where they can, whether through a loyalty program partnership, online booking engine or travel club offering. There is no single “owner” of customer relationships in the travel sector, but many users will have their go-to sites and channels (very likely Google or Expedia).
Not every vacation rental brand will have the scale and reach of Vacasa or Airbnb, but they can absolutely “own” their own websites, loyalty programs and mobile apps – and use travel technology to connect their brand experience to other travel channels and brands.
One success story in this area would be financial services companies like American Express that have enjoyed a long and fruitful partnership with the travel industry through co-brand credit cards and frequent flyer programs.
Many card companies will offer a booking engine on their websites or through paid card memberships because it’s simple enough to do, adds real value, drives ancillary revenue and connects customers to travel products they value. JetBlue created a booking engine specifically for the cruise industry, an example of the cross-industry and cross-platform partnerships made possible through travel technology.
In the same way, vacation rental brands will need to strategically provide new value offerings such as loyalty programs and travel clubs – just like hotels and other hospitality brands are doing.
Vacation rental companies should never forget that hospitality is their true business, and their revenue potential is only limited by how they position their brand.