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HomeAway is pressuring vacation rental owners and property managers to accept online bookings in a bid to spur more bookings, ready itself for additional distribution partnerships through online travel agencies, and perhaps make the company a more suitable target for acquisition.
Behind the scenes, officials from Expedia, which partnered with HomeAway to offer vacation rentals, and executives from Booking.com, which is in “constant discussions” with HomeAway about working together, according to Priceline Group CEO Darren Huston, are undoubtedly imploring HomeAway that it must get its digital act together.
But as HomeAway today unveils a plan “to enable online booking for every property listing in its global marketplace,” it is clear that enabling online booking in the vacation rental context is still eons away from what travelers have come to expect when booking a hotel online.
In a two-year plan starting in mid-2015, HomeAway’s stated goal is to make each of its more than 1 million listings online bookable.
Offline Payments for Online Bookings
It is doing so by implementing a system where payments can be accepted either through the existing HomeAway Payments system, which accepts credit cards and e-checks through HomeAway sites, or by a new offline system that enables vacation rental owners and property managers to accept payments through checks, bank transfers and credit card payments taken over the phone or via a supplier checkout.
Through the offline payment system, HomeAway hopes to bring onboard tens of thousands of vacation rental owners and property managers who previously weren’t set up to work through HomeAway Payments, and to make their properties online bookable.
Owners will still be able to communicate with potential guests offline to answer their questions and determine if they want to honor their reservation requests.
“Owners and property managers can take offline payments today, but they don’t work with the online checkout flow,” says Brent Bellm, HomeAway’s president and COO. “Today, bookings associated with offline payments are not facilitated by our checkout process and in the future they will be.”
The way “online bookings” work through HomeAway and other vacation rental sites, though, is a far cry from online hotel bookings. Travelers can reserve a vacation rental online on HomeAway sites, but owners have 24 hours to decide whether they want to accept the reservation and to notify the traveler that their reservation is confirmed or rejected.
Under HomeAway’s push to bring vacation rentals online, the company will reward — or punish –owners by scoring the quality of their listings and their responsiveness.
“Credit card acceptance is rewarded with higher sort position,” Bellm says.
HomeAway will also monitor which owners are responding to booking requests within 24 hours and which ones aren’t, although the company says it will not penalize owners who don’t accept travelers who might not be suitable for their properties.
“HomeAway tracks acceptance rates, and those who have low acceptance rates will lose the booking-request button and, in extreme cases, lose their listing,” Bellm says.
What’s Behind the Online Push
There are three main reasons HomeAway will go all-out through 2017 to make virtually all its listings — in theory, at least — online bookable.
First, the initiative will lead to more bookings as HomeAway competes with other vacation rental sites, Airbnb and hotel-booking sites.
“The context is that 92 percent of vacation rental travelers want the option of a typical ‘book now’ checkout flow,” Bellm says. “When a listing has a booking-request button, it tells the traveler that the calendar is up-to-date, the rates are accurate, an immediate booking request can be made, and the owner will respond within 24 hours.”
Second, HomeAway is getting pressure from current (Expedia) and potential distribution partners (Booking.com and perhaps others) to make vacation rentals online bookable.
Bellm says that HomeAway listings that are online bookable “will also have the option, in the future, to adopt third party distribution to sites like Expedia.”
Huston of the Priceline Group says Booking.com, which has a strong vacation rental business, primarily in Europe, has no inclination to partner with HomeAway or anyone else in the vacation rental sector unless the properties are instantly confirmable.
Third, as HomeAway CEO Brian Sharples indicated in September, companies such as Expedia, the Priceline Group, TripAdvisor and perhaps even Alibaba will be looking to fill holes in their inventory portfolios.
“This [vacation rentals] is the number two category in accommodations [and] then you have to suspect that some of those players are going to be eyeballing a consolidation there,” Sharples said.
HomeAway undoubtably would like to get consolidated — i.e. acquired — at the right price, that is, and Sharples knows that transforming its more than 1 million listings into online bookable affairs would go a long way toward meeting the requirements of potential acquirers among the major online travel companies.
Vacation rental owners therefore had better get with the online booking program, preferably by accepting credit card payments, or they will find themselves buried on HomeAway’s pages or banned outright.