What’s Happening with HomeAway & How You Can Still Make Money
There has been quite a lot of ‘conversation’ in the vacation rental industry regarding HomeAway’s recent email to customers notifying them that the company “will deactivate listings that contain messaging indicating that travelers are encouraged to pay outside of our reservation system.” This does not preclude vacation rental managers (VRMs) from posting a web address, only from suggesting guests may go around the system in order to avoid the guest service fee.
We get it. Vacation rental managers need (more than ever) to stay competitive, so the additional HomeAway traveler fee risks depressing the market. It’s worth recognizing, however, that the vacation rental industry is facing the same struggles that hotels have confronted with third-party sites, and the reason is the massive growth in vacation rental popularity. The point is: there’s value in the struggle even if it’s frustrating and costly.
What the hotel industry has done, and what vacation rentals should be poised to do, is to use third parties for what they are good at – exposure. According to HomeAway, the new guest fee, which ranges from 4-10% will be used to increase marketing by 50% to make the service more competitive with traditional OTAs, to “increase your visibility and long-term booking success” (LA Times, April ’16).
The opportunity for VRMs that comes with this increased visibility is to find ways to bolster other avenues that increase profits.
For starters, boost your direct channel by being sales-minded with your reservations agents. (For more on the benefit of treating agents as sales people, see our newest ebook Transforming Reservations Inquiries Into Profitable Sales). In addition to increasing conversions and nightly rates, this also allows VRMs to collect essential guest contact information, which creates the opening to remarket directly to them.
As Vacation Rental insider, Matt Landau, says, “You gotta play by the rules or risk getting your listing(s) deactivated. It’s that simple.” While this may rub some VRMs the wrong way, there’s just no getting around the rules, unless you want to turn off HomeAway altogether. But we don’t believe this is the most productive approach. Instead, consider how to offset the fees. For instance, use quick follow-up with systems that integrate and collect contact details then add the contact data to your CRM. Complement this by creating outbound sales programs. Outbound sales, some of which can be automated, can generate from $500,000 to over $1,000,000 for a VRM.
Let’s assume that the fee does decrease the volume of reservations via HomeAway, which the company says hasn’t happened yet. However, let’s say it does. That will make it more important than ever to capitalize on the inquiries that your properties get. This means that you must do whatever it takes to convert those inquiries (a.k.a. leads) and to ensure the maximum stay value, as well as keep those guests coming back. This happens through sales techniques as well as savvy technology. Luckily, the positive results ripple across all channels, far outweighing the issue currently affecting HomeAway listings.