Since February, TripAdvisor’s share price has dropped 27 percent to $38 amid investor concern about its margins peaking in 2009 and falling ever since. That current share price is far below its $108 high in summer 2014.

At issue has been a delay in the shift to a potentially more lucrative business model of instant booking for hotels. In early May, TripAdvisor scaled back this strategy.

But there are corners of the company doing well, and one of those is vacation rentals.

To get an update, we spoke with Ben Drew, who leads supply for the Boston-based TripAdvisor Vacation Rentals division.

Drew has been working on the vacation rentals product since 2012, but this spring he was promoted to vice president of business development and strategy for rentals and attractions at TripAdvisor.

Drew reports to Dermot Halpin, who has headed vacation rentals for several years but this January added attractions to his responsibilities.

Stabilized Listings

Perhaps the most notable change is that TripAdvisor has given up, at least for now, trying to compete with other internet giants to have the most number of rental listings. As of this winter, the company said it had 830,000 listings, but it has since let that number drift downward to “about 800,000.”

The breakdown on how many are self-managed and how many are professionally managed is roughly half and half, the company says.

The company adds that his division has a strength in properties in resort destination areas, which happens to be a place of relative weakness for market leader Airbnb.

Make no mistake, growth in inventory is still the overall story. Drew says TripAdvisor has doubled its inventory since late 2013 and it is now at “about 800,000 rentals.” That total is up from the 650,000 rentals the company told investors it had in February 2015.

Drew says “the focus for TripAdvisor Rentals, particularly over the last year, has been the quality of the listings….We don’t want a situation where travelers have a bad experience, and so we aren’t afraid to part ways with owners who are not engaging with our platform and meeting our standards, such as not canceling on guests at the last-minute or not being reasonably responsive to customer queries.”

He defines “better quality” as rentals that are popular and not receiving lots of complaints because those factors translate into “a better traveler experience, which means quicker conversion and more bookings for our homeowners and property managers.”

Drew says, “It’s a result of this focus that we’ve increased conversion so significantly over the last year, up 60 percent year-over-year. So in other words, we’re getting more bookings on fewer listings than a year ago.”

The growth is an average across all of the company’s channels, meaning TripAdvisor, FlipKey, HolidayLettings, HouseTrip, Niumba, and Vacation Home Rentals.

“We’re very dedicated to this focus. If we find owners aren’t providing an excellent traveler experience – slow response times, cancellations – we work with them directly to improve. Many do, and go on to be successful owners.”

“Some don’t,” says Drew. “We’re not afraid to part company in those instances. We have high standards and the experience we’re delivering to travelers is one of high-quality homes with highly-engaged owners.”

“Today the quality of our listings is tremendously better than it was a year ago,” says Drew. “We look at how suppliers interact with our platform and how travelers interact with it.”

Overall, TripAdvisor is a global business, but its vacation rental business is under-represented in Asia. Given that TripAdvisor has historically grown its listings base through acquisitions, such as 2016’s acquisition of European listing site HouseTrip.”

“We certainly have a history of using acquisitions to grow the business,” says Drew. “So we will keep looking to see opportunities that make strategic sense for us.”

That said, old-fashioned methods are also central. Drew says his team has built up its teams for signing up properties in both Asia and South America.

Technical hiccups over

In summer 2015*, TripAdvisor had a platform migration that moved all of its vacation rentals onto a new backend system. It went poorly, as we reported at the time.

*Correction. This article originally said the migration happened in 2016. Sorry.

In response, more than 100 property managers representing 14,000 vacation rental properties wrote an open letter to TripAdvisor protesting the botched platform migration, including a plethora of problems with the listings, and what they viewed as woeful support from TripAdvisor/FlipKey account managers. The company apologized to customers and promised that the disruptions were over.

Drew says things have been running smoothly since. His team has been working on incremental improvements to help property owners.

The company says it has recently reduced the time it takes to update listings more efficiently for a professional property owner managing. For example, an owner managing dozens of listings used to amend pricing in taxes one-by-one.

Tripadvisor played down any talk that it would debut new software services for property managers to help them figure out how to set their rates and market their properties to extract the most profit.

Drew said, “Our current view on it is that to do something well you have to focus. So we want to focus on having quality listings right now, with conversion growth, and not get distracted by peripheral projects.”

Fee Tweaking

Since 2015, all of the Internet giants have been tinkering with their fee structures, with HomeAway and TripAdvisor copying Airbnb by charging travelers’ a fee for vacation rentals as a way to reduce the cost levied on owners for listing their properties.

In the past year, it adjusted its payment model to be more in line with professionally managed property owner demands.

Drew says they now charge a 3 percent fee on the supply side and a variable one for the guests. It used to charge about 10 percent for professional property managers to list, so the cost there has gone down.

A few months ago Skift launched the latest report in our Skift Research Reports service, The State of the Global Vacation Rental Market 2017.

One fact from the report that’s relevant here: 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.

Drew says TripAdvisor’s overall vision is to become the global leader in providing people a way to compare all types of places to stay, from a five-star hotel to a short-term rental in a city, to a giant vacation home at a resort destination, to a campsite.

“From planning to being in the trip itself with suggestions for attractions and restaurants, we want to help travelers book what they want to book when they want to book it,” says Drew.

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Photo Credit: A property in Orlando, Florida on TripAdvisor's HolidayLettings site for vacation rentals. HolidayLettings