Earlier this year, Skift released its annual megatrends forecast and in it predicted the coming collision between the world of vacation rentals and sharing economy accommodation services like Airbnb.
“On the alternative accommodations side, the world of vacation rentals is fast colliding with the sharing economy — expect to see some fascinating results from this over the next few years. One big result from all this frenzied activity is the mainstreaming of the whole ecosystem, as consumers become more and more aware of creative options to stay and spend time, and real-time availability of inventory — a huge hurdle for the sector at large — becomes a reality.”
“On the front end of this, companies like Airbnb, HomeAway, Luxury Retreats, and other new startups will continue to drive the market while on the backend side, a whole new layer of software and price optimization is professionalizing the sector fast. Expect mobile to change the sector in more ways in the next few years than in anytime in its history.”
And it is beginning to happen fast and furious. Two new developments that came out earlier this week point to this convergence. More specifically, Airbnb moving into HomeAway territory and HomeAway moving into the traditional Airbnb stronghold.
Facing problems with regulators in scattered cities over its peer-to-peer apartment rentals, Airbnb is directly going after HomeAway, Booking.com and TripAdvisor by making a push to sign professional vacation rental managers, who sometimes handle up to 100 properties or more.
The Wall Street Journal reported that Airbnb is developing its own software to tie vacation rentals managed by professionals, as opposed to second homes rented out by individual owners, into Airbnb own site and that the company will test the proposition in various markets before rolling out the product more widely.
Several years ago HomeAway argued that it didn’t really compete with Airbnb because the latter’s customers were younger travelers looking for apartment rentals in urban areas while HomeAway appealed to older guests seeking to rent vacation homes in resort areas.
Well, the battle is now joined and the converging markets are in full swing. HomeAway stated recently that there already is a 10 to 15 percent overlap in HomeAway’s and Airbnb’s listings, and HomeAway is making a substantial push into expanding its vacation rental reach into cities.
In partnership with Gogobot, over the last few weeks HomeAway quietly launched about a dozen cities pages and guides, like this one for Miami, including reviews and recommendations for things to do based on your tribe/demographic/interests.
HomeAway believes there is a lot of pent-up demand in cities, and although it is wading further into Airbnb’s turf, HomeAway plans to stick with vacation home rentals there and won’t get into primary homes/apartments.
Each company, namely Airbnb and HomeAway, sees expanding into the other’s domain as a way to supplement their core offerings rather than abandoning what got them to this point.
“We’ve seen at least two times more demand for the HomeAway listings where we launched Cities pages versus the average listing worldwide,” HomeAway CEO Brian Sharples tells Skift. “Therefore, we’re getting aggressive with our sales and marketing efforts to add new properties in the cities where we know HomeAway travelers want to stay. More importantly, we think we can grow the vacation rental industry by driving awareness and preference for whole-home rentals in urban markets, which we’ll pursue by marketing to loyal HomeAway travelers who might not realize a vacation home is an option in a city like Los Angeles.”
While amply funded Airbnb is developing software to connect property managers, HomeAway is way ahead of the game in terms of having thousands of property managers already using its global sites but also has a variety of software options and services for property managers.
HomeAway, Booking.com and TripAdvisor already have traction with professionally managed vacation rentals, and Booking.com, in particular, is making a big push to sign up individual owners, which is also a HomeAway strength.
HomeAway officials recall how the company faced difficulties in building its reputation with professional managers when it initially began the effort and HomeAway expects Airbnb to face resistance, as well.
Both Booking.com and HomeAway also face blowback from individual owners of vacation rentals because both companies are pressuring these owners to make their homes online bookable. Some individual owners are reluctant to do so out of old habits and because they want extra time to vet the guests who want to stay in their homes.
Airbnb, which has been forced to remove some of its apartment listings in cities such as New York under pressure from regulators, sees vacation rentals as a way to compensate for these losses and to become a more well-rounded lodging business.
There are professionally managed vacation rentals that have listed on Airbnb for some time but now the company will devote a considerable amount of additional resources to recruit more — and to challenge HomeAway on its home turf.