The number of short-term rental platforms is growing rapidly. Remaining successful will mean creating a simple user experience for hosts and travelers.
Expedia Group and Vacasa are both going through tech updates as they work to improve their platforms and compete in the growing industry.
Executives from each company — Tim Rosolio, vice president of vacation rental partner success at Expedia Group and Vacasa CEO Rob Greyber — discussed the changes and more at Skift’s Short-Term Rental Summit on June 7. Dennis Schaal, Skift executive and founding editor, led the discussion.
Watch the full video of the discussion and view the transcript below.
Schaal: Thanks for being here. Just have to confide in the audience that every interview has a challenge. You think this is easy? It’s not. My challenge here is I want to make sure this is not a love fest. Because these guys have known each other for a long time. Tim, you’ve been at HomeAway, Expedia since 2015. Rob, you are former president of Egencia, which used to be owned by Expedia, started there 2004. You were at IAC, Expedia Travel before that, right?
Greyber: No, I actually helped the team at HotWire get started.
Schaal: Oh, right.
Greyber: And then I joined Expedia in 2004 and ran the air business for a while.
Schaal: Got it. Air business, corporate travel, vacation rentals. It’s all one thing.
Greyber: It’s all one thing.
Schaal: So Tim, if Vacasa has a problem with Vrbo, does he know where to find you?
Rosolio: So he’s my biggest partner. And let’s just say he has the bat phone.
Schaal: Oh, there we go. Could we show the first art slide? Tim, what is this?
Rosolio: All right. So not only am I a vacation rental employee, a vacation rental shareholder and a vacation rental traveler, but I’m also a vacation rental owner. And this is a view that one of my guests’ daughters painted from the view outside my balcony. You can’t quite see the lake, but this is the view that they did from outside my house. And it’s a good reminder that we are delivering memories. We’re delivering some of the best experiences that people have in their lives, and that really drives a lot of what I think about all day, every day. When I was in consulting, I worked on a power plant company and I worked on a company that imported parts from China and made toilets. But I’m really thankful that I get to work in an industry now where I get to think about this every day.
Schaal: So really though, I think there’s a codependent relationship going on between you two. Tim, you want Vacasa to get more of that Vrbo drug to distribute more through you. Rob, in your heart of hearts, you want a little less Vrbo, don’t you? I mean 70 percent of your gross bookings last year were through third parties, something like that. So how do you view this dynamic?
Greyber: Well, we think about channel partnerships, we like to think of it in a very constructive way. So I think it’s very healthy for any business to have its own direct relationship with customers. But I think when we think about diversified sources of demand, different customer types, that would be harder for us to reach efficiently. Having these deep channel relationships is really important. So for us, it’s not a zero-sum game. There are lots of opportunities for us to work closely with partners even as we continue to invest in vacasa.com. Having strong channel relationships with partners like Expedia and Vrbo and Airbnb and Booking.com and others helps us to really reach all of the customers that we want and have a diversified base of demand in all of our markets.
Schaal: But doesn’t that detract from building your own brand?
Greyber: We don’t think so. I think we’re all, as part of the industry, focused on our owners, focused on our guests and building the promises that we make. We actually see it as pretty complimentary with our different channel partners and we don’t see it as hurting our brand.
Schaal: And Tim, what about for Vrbo? How do brands play on Vrbo? Do you prefer branded properties? Do they convert better or how do you view it?
Rosolio: The way I view it is the best properties are the ones that win. And ultimately what I want is really professional actors, people that do the right things, that deliver the right experience for the traveler. And if that’s the case, I don’t care if they are the largest property manager in North America or an individual owner, ultimately we can get that flywheel going as long as you deliver the right experience, we help you get that first review. If in fact you get that first review, we help you get the second review so we can get the flywheel going.
Schaal: Got it. The proverbial flywheel.
Rosolio: My favorite word.
Schaal: Let’s talk about the hippo in the room. I’m tired of elephants. Rob, so you became CEO of Vacasa in September. You walk in, the stock price is in the dumps, you have to do two rounds of layoffs within a few months, a de-listing is possible. How do you turn things around? How are you going to do that? And what’s going to happen if you get de-listed?
Greyber: So first of all, that’s not going to happen. I’m not concerned about that. There are different rules that exchanges have, but that’s not really something that we’re focused on. We’ve plans to manage all those types of things. Look, when I joined the company, I saw a number of things that were in place. And I am more excited about Vacasa today than I was on the day that I joined or the month before that I joined first. This is a tremendous category. This is a category that is growing. I think we’re all coming off of the breathless highs of the last several years, and we’re just in a moderation. And anytime there’s a moderation, it can feel like a shock. But this is a tremendous category that continues to grow. This is a category with a hard problem, and I’ve been part of the travel industry for decades.
In corporate travel, there were hard problems to solve. I love that when I think about a business because that means there’s great work to be done, work that is not the work of a day or a month, but of years. And I think there’s a hard problem in this industry to solve. And I think that we are at the nexus of that. And it’s a problem that is best solved with technology enabled services, with the hospitality where you’re using the technology that’s available to help the people that are the closest to our guests and to our homeowners. And that’s where we’re focused on at Vacasa. To do that, I think there’s a number of fundamentals where in any business that any of you have been a part of in your careers, if you’ve been working for the last three to five years, we’ve been in a period in the economy of zero interest rates where there is an enormous incentive and tailwind to grow.
And that necessarily means there are things that are not going to be as tight as they need to be. And so at Vacasa that there are certainly some of those opportunities. We are obsessed about our owners, we are obsessed about our guests. We are doing work, as Tim described, that we are all privileged to do. We are at Vacasa, we talk about this as bringing vacations home. There’s something really beautiful about owners who want to participate in some small way or in a large way in the travel industry. There are things and experiences that guests have around a dinner table or around a kitchen sink cleaning up that you just can’t have in the lobby of a hotel.
And being able to play some small role in that industry is a privilege for us. And so we’re just focused around trying to do those things better and better. And as we do that, we’re focused on our guest experience. Our guest experience is something that we measure every day, every week, every month. It is at the very top of what is in the hospitality, not just the short term rental industry, in the hospitality and in the travel industry. So I think if we keep our eyes on those balls as we move forward, we’ll build a great business for the long term and everything else takes care of itself.
Schaal: Is there a milestone you have to hit in ’23 to get the heat off? Or what would you be satisfied with in ’23? I know you’re thinking about the long term.
Greyber: It’s a very fair question, Dennis. But the short answer is no, there’s not one milestone, there’s not one key that unlocks this. At Expedia, when I joined the team at Egencia and took over responsibility for that business, we grew that business at a 20 percent [compound annual growth rate] for a decade. And still when I left, I left with a list of things to do that was 10 pages long. And I mean that very sincerely. We were obsessed and at Vacasa we are obsessed with the close attention to small things. And that iterative improvement in what we do, the better than we were yesterday and tomorrow, better than we were today is I think the unlock in this industry.
Schaal: Switching gears a little bit. Tim, you’re obsessed also. Just thought I’d mentioned that.
Rosolio: All day every day.
Schaal: No, seriously. So Vrbo is going through now this big tech migration. So Rob, this might sound familiar to you because it seemed like Expedia was going through Tech migrations for about 20 years. But anyway, what is that going to do for you?
Rosolio: It’s going to do a lot. I think we’re really excited about the progress. We are currently ramping traffic on our U.S. point of sale on the unified sort of Expedia and Vrbo and Hotels.com stack. And it’s going to do a lot of things for us. So first of all, there are certain things that we will get this year just because we pull it over from Expedia. If you think about what we’ve been doing in VR, for years we haven’t built strike-through pricing and for appropriate merchandising, that’s a fundamental thing of E-commerce and we haven’t had it. By being on the Expedia stack, we get that really, really soon. But I think the bigger win here is by being on one stack, it enables us to build things faster. So something that I think is a huge opportunity, some of our competitors have already built it, it’s flex search. We can build flex search in one place that will be beneficial for hotels and for vacation rentals.
Schaal: What does flex search mean?
Rosolio: Flex search is trying to identify, I want to stay in Destin Florida sometime in July rather than necessarily July 5th to July 10th, because that enables you to see a broader selection of supply. So that’s an example of something that we can build faster and we can build it for all lodging rather than just hotels or vacation rentals. And the way I think of it is this is our moment to build tools like that that will help us build some things that we know our competitors have that are winners and then eventually build faster to surpass them.
Schaal: It’s a little confusing. So Expedia has some different short-term rental inventory than you have and more urban, is there going to be a push into urban, who does what?
Rosolio: Today, we are in a space where we have two separate tech stacks, two separate contracts. We know it’s not perfect. Largely what they’ve been focusing on is multi-unit inventory that sells well next to hotels. It’s a hotel alternative. And Vrbo has been focusing really on those great beach houses and ski houses that are standalone homes. I think by unifying the platform, what we’re able to do is really surface that inventory on each other’s sites, not via a third party inventory experience. And you can have, for example, great multi-unit Sonder or Vacasa inventory that shows up on Vrbo in an appropriate clustered experience where people can shop at light with room types and rate plans. At the same time we’ll have people that will be able to search Vacasa beach houses on Expedia and Hotels.com. And by the way, also via our B2B business where we can actually service it to other brands.
Greyber: And I actually think this is interesting and in a lot of different ways. I was talking with one of our partners last night at dinner, and one of the challenges in merchandising vacation rental inventory with other types of travel inventory, for example, hotels or multi-unit listings, is we as customers don’t know how we want to search for that. Maybe there’s a great two bedroom hotel suite that could accommodate my family and I, or maybe it’s an apartment or maybe it’s a home. How do we want to search and sort that? And so this isn’t as much to me about the finish line that Expedia and others in the industry are approaching. It’s more about a starting line because we’re going to test and learn and understand that there’s no answer that Expedia or Airbnb or Booking or Vacasa or others could build you today. Because we as consumers don’t know how we want to do that, but we’ll learn that together. And I think having those types of platforms hopefully will help us unlock that.
Schaal: For both of you, how do you navigate the current environment? We’ve heard in numerous panels today about the slowdown in growth. Is the thrill gone in short term rentals?
Greyber: Absolutely not. But there was a real live economist on this stage before. My IQ is rising just sitting here, which is not hard. So I think first of all, there’s a dynamic which is, one, where supply rose very, very quickly and I think induced by what we’re seeing as really great dynamics in the industry overall. And that induced a lot of new participation in the industry. In the short run, that’s going to be hard and in the long run it’s going to be great. I think on the demand side, there’s a little bit of angst, a little bit of moderation. We’re all feeling it in terms of economic uncertainty. And I think it’s important to keep all of these things in perspective. When you look at some of the dynamics about ADR and Rev Pan and so forth, those things are moderating on a year-over-year basis and still higher than they’ve almost ever been. And so when you think about demand, when you think about how that’s expressed, all of these things in the short term, challenges. In the long term, great.
Rosolio: And I would say I think this is an inflection point, and I think our industry is actually about to go on a run. And the reason why is you had all of these people that tried short term rentals for the first time during the pandemic and because a lot of the property managers that are out here, they very often had a terrific experience and now it’s part of their consideration set. So this year maybe they’re going to New York and they’re staying at the St. Regis and hopefully they booked it on Expedia, but now they’ve stayed at vacation rentals. They consider that as part of something they might want to do next summer. And it’s happening at the same time that we’re doing all of this hard platform consolidation work, which hopefully will bring new and exciting things to the category, like the one key loyalty program.
Schaal: And speaking of New York, New York’s about to implement registration and you can’t have a door lock on your bedroom for a private stay. So we do have a question about regulation from the audience. What plans do you guys have with different cities trying to limit short term rentals or completely stop them?
Greyber: So at Vacasa industry advocacy is incredibly important for us. We participate very actively with our communities. We have people that serve on city councils and engage very, very closely, number one. Number two, we have been more active on a year-over-year basis. Historically work closely with VRMA. And so if you’re involved in the industry and you’re not part of those advocacy efforts, I would strongly encourage you to do that. There’s donations, there’s ways that you can be involved personally and everything in between. At Vacasa, we have actually increased the level of financial engagement we have in supporting advocacy efforts. Look, we believe that there is a level of regulation that is important and appropriate in the markets. So we should all be ensuring that our employees are paying taxes and working in the communities and the communities are benefiting from that.
At the same time as a community, there are conversations to have about what do you want the composition of your neighborhoods to look like and how do you want your city to function with travelers and tourism? And during COVID, you saw this in a pretty evocative way where communities were saying, “Hey, if I have all these people coming to stay in my community, then the restaurant workers and then the stores have to stay open. And that’s a real challenge in that period of time.” And I don’t know which would be better not to have that as part of the economy in a moment like that or to have it and to deal with those challenges. But it’s ultimately not up for us to say, but it is up for us as an industry to engage in those conversations. And that’s exactly what we’re doing.
Rosolio: I think Rob put it well.
Schaal: See, I told you, love fest.
Rosolio: Biggest partner.
Greyber: We’ll do arm wrestling.
Rosolio: I think we as an industry need to understand that this regulation thing isn’t going away. And there was a time probably when I started in the industry where we put our head in the sand surrounding it, but based upon the growth of the industry, there’s this opportunity for us to meet regulators in the middle. And the way that we do that is, we have a government affairs arm that is deep in those conversations, but I think it’s also really important that we as an industry get the individual hosts and local property managers that are doing so much good for their communities involved. Because when they look at me or they look at a very large property manager, they say, “Well, of course you want everything to be legal. This is how you make money.”
But if we actually point towards the story of the person who can afford to pay their mortgage because they do short term rentals, or the person that’s extremely engaged in their community and always paying their taxes, that is a different story that works far better with regulators. So I think for us it’s about coming together with one voice. And I think companies like Expedia or Vrbo are very eager to help you amplify that voice so that the right people are being heard by the regulators rather than the tech conglomerates.
Schaal: Well, Airbnb seems to have been a lonely voice in suing New York City over these regulations. Where were you guys?
Greyber: Look, I think that we get asked and in the industry there can be a litigation as a first resort type of mindset. I think that, for example, VRMA has been very proactive in trying to reach out to state legislatures, for example, or local municipalities as another example and engage with them about what good regulation looks like. And for this not to be a pure love fest, I might just slightly amend something that Tim said, we don’t want everything to be allowed or everything to be legal because they’re real safety. And there’s also just community considerations that we’re a local property manager with great scale, and so we want to work with our communities to build the type of tourism industry that they want to have, not what we come up with at headquarters or something like that. So I think engaging with them and if it ultimately results in needing to go to the courts to litigate something, I think that probably means that some of those industry and other advocacy efforts have not been as successful as they need to be.
Schaal: Got it. Could we have the HomeCare slide?
Schaal: Here’s the HomeCare dashboard slide. What a coincidence. Rob, so you’ve talked about how you felt that some of Vacasa’s tech was lacking, needs improvement. Now you do this dashboard, there’s some homeowner churn that you’ve mentioned the last couple of quarters. So where does this fit in and how are you addressing tech issues?
Greyber: Look, like I mentioned earlier, when I left Expedia, I had a list of things after working on it for 10 years in corporate travel that we still wanted to get done and we were breathless and hungry and eager to do it. And in my mind there’s going to be a list of things 10 pages long at Vacasa for the next 10 years or however long I’m lucky enough to be with the team. We’re obsessed, as I mentioned earlier, with our owner experience. And we think all of us in this industry have to be thinking about that important dimension. This example, and by the way, I gave two pictures to Dennis. One was a really cute one of my son when he was like four. We got this one, but that’s okay.
No, I’m kidding. There it is. That’s better. But my wife is a first generation immigrant and when I met her family for the first time, we rented a vacation home and they got there first and Natasha and I sort of rolled in from the airport and she had to run to the bathroom. And I didn’t speak the language, but we just figured it out. And then years later we went back after we had had our son and there he is by the pool at a different home that we’d rented there. But anyways, what we wanted to do with that HomeCare demo that you saw behind was really integrate more into the owner app so they can see not just, hey, a real time reservation, but hey, let’s see the photographs of the last clean. Let’s see the inspection report. Let’s see a bunch of richer data about how we’re actually caring for your home.
Because that’s a critical element of how owners think they want to deliver these great experiences, but this is an incredibly important asset. Maybe they’re a professional investor and have three or four homes, maybe they’ve inherited this home and it’s how they’re putting their children through college. But whatever it is, caring for that home is enormously important. And this is one of the avenues of investment that we have at Vacasa. We’ve seen terrific results from this, great engagement from it, and we’ll continue to invest behind this and other initiatives that we think makes the experience of vacation rentals better for our homeowners, better for our guests, and better for our teams in the field.
Schaal: You’ve said recently that one thing you need to do better is to explain to homeowners what you’re doing for them. So this fits in.
Greyber: It does. And I think that that comment was also related to, again, AirDNA was on stage earlier and went through a really thoughtful, I thought, data rich conversation, which you don’t always get to do with every single homeowner and explaining. And many homeowners are saying, “Hey, I’m seeing rates different than they were last year.” And working through those types of dialogues is very important, but putting it in experiences like this we think is compelling as well.
Schaal: Before I get to some audience questions, Tim, Vrbo is about to get its first loyalty program. Expedia had a bunch of loyalty programs. They’re consolidating them into one. It’s called One Key, supposed to be rolled out, I believe early July.
Rosolio: Month from today.
Schaal: What’s that going to do for you?
Rosolio: I think it’s going to be transformative for the vacation rental industry. The story I always use is when I was in consulting, I had triple executive platinum and the ambassador I could call to book my hotels and all that stuff. And I was earning as many points as you could possibly imagine. But then when it came time to go on a vacation, the last place I wanted to be was in a hotel and way back then, I certainly would’ve used the opportunity to stay at a vacation rental. I think when Jennifer was up here earlier, she spoke to the fact that within Bonvoy, which is on a smaller set of supply than we have, but it’s a curated set, 40 percent of their bookings are people that are using points. And I think that if you can expand that, not just to vacation rentals, but the full depth and breadth of everything that Expedia has, whether that’s activities or rental cars or airfare or hotels, it’s going to be pretty compelling and pretty unique for the travel industry. I’m pretty excited about it.
Schaal: And Rob, you have nothing on your plate. So are you about to announce the Vacasa loyalty program today?
Greyber: Let me check my email.
Schaal: No, but what role do you think loyalty plays in terms of programs like that?
Greyber: Look, I think it has enormous potential for diversified businesses like Expedia, for Marriott, for other players in the industry as they start to think about it. I think that the dynamics of rewards and repeat booking and greater customer engagement are just one of the avenues that I think are still untapped opportunities in the industry as we move forward.
Schaal: Question from the audience for Tim. Will the merged Expedia platform allow hotels to sign one contract and load all inventory or will the hotel have to sign separate Expedia and Vrbo contracts?
Rosolio: The long-term intent is one contract for Expedia Group and ultimately that will drive distribution across all of our websites.
Schaal: Are there thoughts on exiting lower yielding properties or is the industry not there yet?
Greyber: I think that there’s probably a couple different avenues of that question. I think that there are some owners that came into the industry with elevated expectations and they may be realizing lower yields. And so those owners may be looking at whether or not they want to do short-term rentals or long-term rentals or sell the home or utilize it in some other way. But I think we’re all going to see how that plays out over time.
Schaal: Priceline announced yesterday or today about some generative AI stuff that they’re doing. They’re going to do a travel concierge, they hope to use AI to speed marketing to trending destinations, yada yada. How about AI for you guys? Anything on the agenda?
Greyber: Yes, I think the new large language models are very exciting. If you haven’t used them, you’ve got to check it out, it’s the easiest thing in the world. I think one of the challenges in using them, very, very broadly, is they’re prone to hallucinations, which there was a great story about a lawyer who submitted a brief to a court and it was succinct, it was clear, it was well written. The only problem is all of the case law that was cited in it was completely made up.
Schaal: But the lawyer got sanctioned, I believe.
Greyber: And they should have. And the point is that in a very, very broad setting, these models are not appropriate because that’s what they do. They’re just generating more of what you think you want to hear. But in confined settings, here are all of my customer service policies, here are the issues that this customer has. Can you help an agent more quickly digest all of this complexity and all of this complexity and find three things to do? Absolutely, you can do that. We’re using it in a number of examples like I just described, on the customer service side. We’re using it in a number of other areas as well. Where I think the industry is going to go is where industries go when new technologies come into place. Initially, you’ll have lots of exciting point solutions that emerge and those emerge because what new technology does is it takes the cost of information processing and the time required to do it to zero.
And so you have lots of new things that spring up, but ultimately the value is really realized through platforms. So you’ll see Microsoft integrate ChatGPT into Microsoft Office. Google will do the same thing. There will be other applications. What’s really exciting is these large language models can be trained on a computer that used to be the size of a supercomputer, and now you can do them on something the size of an iPhone. When that happens, you’ll be able to put them in platforms like ours, like Vrbos. You won’t need these large horizontal platforms, I think, and you’ll be able to do a lot more of this work sort of in your own sandbox.
Rosolio: And we’re already plugging in with ChatGPT, we’re using it for recommendations for trips. Today, is that generating X percent of our bookings? I don’t think so. But the important thing is we’re starting to get the learnings about how it works because I think the value isn’t necessarily just in the tool, it’s in how you harness the data for the tool to actually deliver something awesome for the traveler, which is hopefully the journey that we’re on.
Schaal: Audience question. Party houses and how do you improve relations with individual hosts?
Greyber: So this was not an audience, this is Dennis’s question. He got in trouble for that party house. No, I’m kidding. Look, we are obsessed about that type of experience. We do a lot of work. As I said, we want to deliver great guest experiences and owner experiences, but we also look for the flip side of that, which are clear violations of the community norms and our norms and the rules, and we would have no issue in banning users from our platform if that type of behavior goes on.
Schaal: And does that happen frequently?
Greyber: I wouldn’t say frequently.
Rosolio: And I would say that we have a policy that we’re a no party house company, but on top of that, we’re building tech that enables us to take a look at a traveler and owner experience and do a risk score surrounding what’s the likelihood for this to be a party so that if this is a one night booking and it’s on a Friday night and the person’s credit card is from a place that’s a couple blocks down the street from the house, that’s kind of the red alert one that we’re probably not going to want to have on our website.
Schaal: Tim, you said you were at an inflection point. What’s a big trend each of you are looking at and are excited about? Rob, you first.
Greyber: Me first? I was gathering my thoughts while he was going. I think the big trend that I’m excited about is really the continued adoption of the product in the North American market. Vacation rentals have been much more of the fabric of the travel industry, I think in the European market and in other global travel markets. I think as you see that trend continue around the maturing of this as something that travelers put in the regular consideration set, I think it opens up an enormous number of opportunities.
Rosolio: And for me, I think it’s about more trip types for vacation rentals because I think people for years, even before OTAs existed necessarily have been doing the annual beach blowout, but we haven’t necessarily done a great job of saying like, “Hey, I see that you live in Austin, Texas. I understand that you went to Destin for your annual beach blowout. However, do you know that Fredericksburg’s an hour and a half away and here is an offer for you to do something special in Fredericksburg.” So that people are using vacation rentals maybe four or five times a year rather than just the annual beach blowout.
Schaal: Got it. Let’s go have a blowout.
Greyber: Thanks very much everyone. Thanks so much.
Schaal: Thank you.
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Photo credit: Rob Greyber, CEO of Vacasa (left), and Tim Rosolio, vice president of vacation rental partner success at Expedia Group, joined a panel moderated by Dennis Schaal. Ryan Bourque / Skift