Q&A: How Vrbo Is Building Trust With Vacation Rental Guests and Partners

This sponsored content was created in collaboration with a Skift partner.

The vacation rental sector has grown dramatically since before the pandemic. Skift Research estimates that short-term rentals (aka vacation rentals) are now a $67 billion market in the U.S., representing 18.6 percent of the overall accommodation sector. On a global scale, short-term rentals represent 14.2 percent of the $908 billion global accommodations market.

This rise has corresponded with shrinking booking windows, increased shoulder season travel, a shift away from traditional booking patterns, and more travelers mixing business and leisure in longer stays. Many hosts feel pressured to relax their booking and cancellation policies and increase flexibility wherever possible in order to stand out and capture that increased demand.

SkiftX spoke with Tim Rosolio, vice president of vacation rental partner success at Expedia Group, about how the vacation rental market is changing and how Vrbo is helping the industry grow and mature to benefit partners and travelers alike.

SkiftX: Why do you think domestic travel continues to drive the vacation rental market?

Tim Rosolio: At Vrbo, we’ve historically been focused on beach, ski, and mountain leisure destinations. We generally find that the majority of those trips are within a couple hours’ drive, through corridors like Los Angeles to Palm Springs or Atlanta to Destin, Florida, for example. Our business has historically been driven by domestic travel.

Post-pandemic, however, we’ve seen a significant number of U.S. travelers book trips in Europe through the supply we have with our vacation rental brands there, including Abritel in France, FeWo-direkt in Germany, and Vrbo for the rest of Europe.

SkiftX: What are the key differences between vacation rental purchasers and hotel purchasers?

Rosolio: We see with our Vrbo travelers that they book earlier, stay longer, and spend more. In addition, vacation rental purchasers are typically booking their big annual trip, which often involves multi-generational family travel. There’s a lot more complexity and consideration that goes into that, so the person organizing and booking that trip typically spends more time researching and preparing than they do for a hotel stay.

People typically book multiple hotel stays in a year, and they often do it last minute. But the complexity that comes with your one amazing summer beach vacation — maybe with your children, maybe with your parents, maybe with both — that’s a lot of work.

Our Trip Planner tool enables a group of people to collaborate together and indicate thumbs up or thumbs down for vacation rental properties, hotels, flights, and activities across Vrbo, Hotels.com, and Expedia. It helps families, friends, and other groups navigate some of the complexity of trip planning.

SkiftX: How is Vrbo building trust between vacation rental consumers and partners or hosts?

Rosolio: Trust is very important in our category because every home is different. When a partner delivers a great experience, we provide a badge that shows the traveler they can trust this partner as a Premier Host. We also offer 24/7 support, because if a traveler is spending $2,500 on average for a booking and something goes wrong, they should be able to quickly get in touch with someone to resolve the issue.

If you shop in the vacation rental category, you’ve probably had the experience of choosing a property with a low nightly rate, only to find the price go up at check out due to unexpected fees. We’re fully committed to showing the total price upfront throughout the booking experience so there isn’t that bait-and-switch feeling.

We also offer insurance products for travelers. If something goes wrong, we’ll take care of you via our Book with Confidence guarantee. And for our partners, we offer liability protection and property damage protection to give them peace of mind about travelers staying in their homes.

SkiftX: How does Expedia’s One Key loyalty program benefit consumers?

Rosolio: We found that 83 percent of travelers don’t get any loyalty value or status when they book their trips. Expedia Group’s One Key loyalty program, the first of its kind for the vacation rental category, was built to help change that. Travelers have the ability to earn and burn across our brands using OneKeyCash, our new rewards currency: Expedia, Hotels.com, and eligible Vrbo properties. This enables travelers to mix and match across a wide variety of trip elements.

For example, a traveler could earn OneKeyCash at a hotel and then use them to book an eligible Vrbo property. Or, a traveler could earn OneKeyCash with Vrbo and use them to book a rental car to drive to their vacation rental. This is revolutionary in the OTA space.

When I was in consulting, I traveled probably 45 weeks each year, always staying at hotels. I had every type of status and all the points you could possibly imagine — but when it came time to go on vacation, the last place I wanted to be was in another hotel. If One Key had been available then, I absolutely would have used the OneKeyCash I earned from hotel stays to book a more spacious vacation rental.

SkiftX: What are some key takeaways about the vacation rental market that came up at EXPLORE Fest, Expedia Group’s vacation rental partner conference?

Rosolio: The theme of the event was, “When the traveler wins, we all win.” During the pandemic, many people tried vacation rentals for the first time. They had a great experience, the traveler won, and now vacation rentals are part of their consideration set for how they travel beyond just that one beach trip. The more we can bring travelers into that funnel, the more the entire industry wins.

In order to level up the traveler experience, we’re changing our marketplace to incentivize good behavior and disincentivize poor behavior. We announced new thresholds for what it means to be a Premier Host and a financial penalty for partners when they cancel on travelers.

When a traveler books through us, they expect to have a good experience, and they hold us accountable for that experience. We need the right carrots and sticks in our marketplace to make sure the experience is great, because no matter where they stay, they hold Vrbo accountable. Their likelihood of coming back to Vrbo is dependent on the experience they had with the host — or as I like to call them, partners.

SkiftX: Why is it important for Vrbo to professionalize the vacation rental market? What does that mean for hosts?

Rosolio: Professionalizing the market is important on a number of fronts. First, our partners need to deliver a certain element of consistency. For example, the vacation rental should be clean and match the photos on the website every single time a guest checks in.

In addition, our partners should be engaged in their local communities. We’ve all heard the horror stories about party houses, parking problems, and other nuisances. A professional partner cares about their neighbors and their community and does their part to make sure those things don’t happen.

Finally, professionalizing the market means encouraging vacation rental partners to pay their taxes, which is beneficial for the long-term growth of the industry.

If our partners do these three things, not only will we bring them a traveler, but we’ll make sure they get a great review — and repeat travelers.

To learn about partnering with Vrbo, click here.

This content was created collaboratively by Expedia Group and Skift’s branded content studio, SkiftX.