TripAdvisor/FlipKey's challenges with the vacation rental industry aren't only technical ones. They also reflect increased supply available from individual homeowners and apartment renters. TripAdvisor, Booking.com and Airbnb are going after this sector and professionally managed properties are feeling the lumps.
In recent months TripAdvisor has transitioned its FlipKey unit’s vacation rentals onto a single technology platform and the ensuing problems have left many professional managers of vacation rental properties angry, and they are reducing their listings and looking for alternatives.
At the same time, in a move that seems to be reflected industrywide among some competitors, including Booking.com, FlipKey has given new emphasis to individual homeowners, which make up the majority of potential listings, and tweaked its business model, as well.
More than 100 property managers representing more than 14,000 properties have written an open letter to TripAdvisor CEO Stephen Kaufer lamenting the problems and protesting the fact that they deliver high volumes of listings to FlipKey yet must pay 10 percent commissions while individual owners only pay 3 percent.
TripAdvisor/FlipKey acknowledges some of the problems that came with its platform migration, characterized as one of its biggest changes ever, and states that it is increasing staffing to meet the challenges.
One of the open letter’s signers, Lisa Byrne of Italy Perfect, with its 300 properties in Europe, tells Skift that the new TripAdvisor/Flipkey platform “is just a mess and doesn’t work very well.” Byrne points to the difficulty in updating prices and the site showing Italy Perfect’s response time to potential guests as not available when the company prides itself on responding quickly, for example.
The open letter, which was signed by property managers ranging from Vacasa, with more than 2,500 professionally managed properties, to Acme House Co. of Palm Springs, California, with 75 properties, cite listings that show inaccurate locations and TripAdvisor/Flipkey support staff who are unresponsive.
“We love FlipKey and we used to ask HomeAway to be more like FlipKey,” says Byrne of Italy Perfect, who acknowledges reducing her listings on FlipKey because of the changes. “We don’t want to see FlipKey go away. They have a big mess on their hands and they don’t know how to deal with it.”
Byrne of Italy Perfect, which has used FlipKey since 2009, says her company lists on all of the major sites, including HomeAway’s VRBO, but finds FlipKey, with its new platform, the most difficult to administer. For example, when adding charges for cleaning services and other fees, Byrne says she has to go to a different section of the site than where she inputted new pricing and then “enter everything all over again.”
Byrne says she wants FlipKey to be a strong player in the market. Citing rival Booking.com’s insistence that all its listings be instantly bookable, and not giving vacation rental managers time to vet a potential guest, Byrne says, “We don’t want to see Priceline dictate instant booking to everyone.”
On the commission issue, where a professionally managed property might have to pay 10 percent commission to TripAdvisor/FlipKey, Byrne says it is excessive — especially compared with 3 percent paid by individual homeowners — and the 10 percent challenges some professionally managed properties’ profit margins.
Asked about the open letter from property managers, Tracey Zhen, FlipKey’s general manager, says the shift in FlipKey’s technology platform was “the biggest change we’ve ever made” and didn’t come without challenges.
“Our teams worked tirelessly to meet these challenges and help our customers who were impacted by them,” Zhen says. “We know it was rocky and we’re sorry about the issues the migration caused some of our customers. We completed the transition several months ago and we’re happy to be back to business as usual.”
Zhen acknowledges that a “key change this year and last has been our increased focus on homeowners as demand to list independent properties continues to rise sharply in the vacation rental market. Property managers, which have sometimes thousands of properties and require account managers, custom technical integrations and more, have different requirements than independent homeowners. We’ve set our rates to match these requirements, and these rates are very much in line with industry standards.”
FlipKey’s Zhen concedes that the changes over the last year triggered “an increased workload for our account management teams.”
“We’re continuing to make hires to align to our growth rates and services levels,” Zhen says.
Italy Perfect’s Byrne, who signed the open letter but wasn’t one of its initiators, says Zhen is trying to minimize the problems through her response.
Vacation rental managers, some of whom say they were threatened with getting delisted from FlipKey if they continued to complain, are looking for a more forthright dialogue with TripAdvisor/FlipKey about the support problems and commission structure.
If that doesn’t happen soon, then vacation rental managers are looking to confront TripAdvisor/Flipkey at one of the sector’s largest conferences, the Vacation Rental Managers Association’s 2015 conference in New Orleans October 25 to 28.
Following are the vacation rental managers’ open letter to TripAdvisor CEO Kaufer and FlipKey’s response:
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Photo credit: The living room at one of Italy Perfect's properties, Elegante, in Rome, Italy. Italy Perfect