A silver lining in the coronavirus fiasco, for companies that survive it, is that the crisis gives many the chance to reset and take stock of their operations. Neglecting to do that can be an opportunity that may never resurface.
Short-term rental platform RedAwning hit the reset button during the coronavirus crisis as it sold a subsidiary, Leavetown, and rolled out a program to be the exclusive distribution manager for property management companies.
This all took place after parting ways with about one third of its employees, but vacation rental bookings last week surged 42 percent higher than the same period last year as U.S. drive markets continued reopening, founder and CEO Tim Choate told Skift Monday.
North America-focused RedAwning, with some 35,000 properties in its portfolio, can serve as one-stop shop for property managers and owners, handling their distribution to Booking.com, Expedia, Vrbo, Airbnb, and Google Travel, as well as marketing, price-optimization, and website-building services.
Choate said RedAwning sold Leavetown, which it acquired in 2018 for an undisclosed sum and had a European focus, back to its founders.
The asset disposal was a move to cut costs, and focus on RedAwning’s core business, Choate said, adding that Leavetown had a partnership with major property manager Interhome in Europe that required attention. Skift reported at the time of the Leavetown acquisition in 2018 that RedAwning had around 250 employees.
Choate said RedAwning is already rehiring some employees sidelined because of the coronavirus travel collapse, but acknowledged that the company now has fewer employees. Perhaps smaller is better in some instances, he said.
Making An ‘Exclusive’ Play
Exclusive inventory is a kind of holy grail in the short-term rental industry. Peter Kern, the CEO of Expedia Group, which like RedAwning but on a much-larger scale is pushing to simplify its business, said in a Skift interview in May that he hopes its Vrbo home-sharing unit will notch more exclusive deals with property managers to take advantage of Airbnb’s refund-policy-inducted problem with hosts.
While tacitly acknowledging that some hosts left the platform, Airbnb CEO Brian Chesky told CNBC Monday that the company has more listings today than pre-pandemic.
Expedia Group announced Tuesday that it will phase out its HomeAway brand in the United States starting next month. Expedia’s ongoing and expected emphasis of Vrbo as its primary vacation rental brand has been ongoing, and the missteps in the transition from HomeAway to Vrbo have been a drag on the parent company’s financials for an extended period.
In RedAwning’s case, its drive to notch “exclusive” deals with both its core property manager base, but also with individual home owners is not about RedAwning being the sole booker of partners’ rentals.
Choate said “exclusivity” in RedAwning’s case means the company would be the sole provider of distribution, price-optimization, and website-building services for partners. For example, a property manager who might have had RedAwning handle Booking.com and Airbnb distribution, but handled Vrbo on its own, would now sign on to have RedAwning handle all such distribution and services.
Choate argued that these partnerships enable property managers to have lean teams while allowing RedAwning to become their “global team.” Choate said 10 property managers, including Hayes Vacation Rentals in the Orlando, Florida area and Long Cove Resort in Charlotte, North Carolina, have signed up for these exclusive deals.
RedAwning said the booking surge it is experiencing has been strongest in beach, lake and mountain destinations in the United States. Like other short-term rental executives, Choate contended that vacation rentals are the safest bet for families in the coronavirus era.
Asked about the relative strengths of distribution partners, Choate said “Airbnb has come back with force,” particularly in mountain locations reachable by car.
Google Travel, though, is still in rollout mode for vacation rentals, he said. “They haven’t become a giant influence yet like they could, and eventually will be,” Choate said.
Photo credit: Chew Jetty vacation home in Georgetown, Malaysia as shown July 31, 2016. RedAwning is seeing a surge of bookings in North America. The vacation home displayed is not affiliated with RedAwning. Ah Wei / Flickr.com