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Last week we launched the latest report in our Skift Research Reports service, The State of the Global Vacation Rental Market 2017.
In the our latest research report we explore the tech ecosystem behind the vacation rental industry and how technology has impacted and transformed the industry over the past years. The vacation rental scene has clearly awoken an interest throughout the travel industry, with larger travel players such as Priceline, Expedia, and TripAdvisor moving into the vacation rental marketplace segment, looking to consolidate it.
Below is an excerpt from our Skift Research Report. Get the full report here to stay ahead of this trend.
TripAdvisor entered the vacation rental marketplace segment in 2008 when it took up a majority stake in FlipKey. “Vacation rentals is the hot emerging category in travel and FlipKey has a great foundation and a smart business approach,” said Steve Kaufer, founder and CEO of TripAdvisor, in the press release about the acquisition. “We believe we can help FlipKey become the leader in the space and, in turn, FlipKey content will satisfy a growing need for TripAdvisor users.”
Over the years TripAdvisor continued expanding its vacation rentals marketplace reach by acquiring the then largest UK vacation rental marketplace HolidayLettings in 2010, Niumba in 2013, Vacation Home Rentals in 2014, and HouseTrip in 2016. Through the latest acquisition of HouseTrip in 2016, TripAdvisor reached a total of 830,000 vacation rental listings.
TripAdvisor has aggregated all vacation rental inventory under their “TripAdvisor Vacation Rentals” platform, while also maintaining the acquired sites running and giving them access to the aggregated inventory.
In regards to pricing, TripAdvisor has also adapted to the splitting-costs model between customers and suppliers. Property managers and homeowners are charged a 3% fee from TripAdvisor and guests will also see a traveler charge ranging between five and 15%. Under the current model, all listings include TripAdvisor’s global exposure and are thereby listed across all its sites.
TripAdvisor entered the market with the advantages of being a well-recognized brand in travel and having an already high volume generated through its platform. Moreover, due to the core product of reviews the company is built on, it has strong capabilities when it comes to big data. Something that could be leveraged to specifically target consumers interested in vacation rentals and combine vacation rentals with other services they offer.
For financial statements, the company divides its revenue into two segments: “Hotel Segment” and “Non-Hotel Segment.” Alongside vacation rentals, the non-hotel segment is also made up of their attractions and restaurants offerings, and has been making up a larger and growing share of TripAdvisor over the past years.
From 2014 to 2015 alone, their non-hotel segment grew by $118 million, amounting to a total of $229 million and roughly 15% of the company’s total revenue. Throughout Q1–Q3 of 2016, the non-hotel segment already generated $225 million and is on track to see another year of solid growth.
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