Escapia Blog - Vacation Rental News and Trends

Blogging VRMA: TripAdvisor on Vacation Rentals

by Bill Furlong, CEO

One of the biggest developments in the vacation rental industry in the past year has been TripAdvisor's commitment to the category.  With tab-level visibility for vacation rentals, home page promotions on TripAdvisor and creative approaches like their hotel/vacation rental price comparison tool, TripAdvisor is making a clear commitment to the category.

TripAdvisor's CEO, Stephen Kaufer, gave a talk at VRMA on TripAdvisor and their approach to the category.  Much of the presentation was focused on TripAdvisor itself; though there was some interesting information about how they see the challenges and opportunity in the category:

...TripAdvisor's overall focus in the category
- TripAdvisor is here to grow the vacation rental market by putting it in front of the millions of hotel eyeballs that they have already on their site.
- They want to bring the TripAdvisor reputation for trust and transparency to VRs.
- They want to remove the reasons why people don't try vacation rentals.

...Their perception of vacation rental challenges
- Awareness: only 10% of people have stayed in a VR.  TripAdvisor is addressing that by introducing vacation homes and giving them a high level of visibility.
- Confidence: TripAdvisor are facilitating guest reviews.  Photos are key; their stats suggest that more photos mean more bookings.  20+ photos lead to a 150% increase in inquiries.
- Trust in owner/manager:  37% are worried that they won't have an emergency contact.  TripAdvisor survey suggests that people will pay more for the reliabity that comes with professional management; of 177 people surveyed, 53% would rent from a PM even if it may cost more, 47% said they prefer to rent from an owner because it may cost less.

...TripAdvisor is helping differentiate VR managers from RBOs.
- TripAdvisor clearly labels a listing as being from a "certified owner" or a professional manager.
- The manager has an opportunity to present their brand, provide aggregate rating information, describe their company and have a link to their site.

...Repeat travel is huge
- 24% have stayed in a vacation home 10+ times.
- 14% stay in the same vacation rental property every year.

...Family focus is big
- 66% stayed in a vacation home because they can sleep more people
- 64% like having a kitchen for cooking meals.
- 60% like having more hang-out space.

Blogging VRMA: Consumer Travel Trends

by Bill Furlong, CEO

Peter Yesawich, President and CEO of the Ypartnership, the PR agency used by the VRMA,  gave a very informative and entertaining presentation on how the consumer travel landscape is changing.  The following were his main points:

...Travel is down from the peak
- 55% of households took 1 trip/year75 miles or more from home.
- That number has dropped from a peak of 66% in 1999 and 63% as recently as 2007.
...the Web is the dominant way people are planning travel
- % of households with web access has increased from 11% in 1996 to 80% in 2008 and 2/3 of that access is high-speed.

How do people plan and purchase travel:
- 61% use the Internet exclusively
- 24% use a travel agent and the internet
- 7% use a travel agent
- 8% use neither
(sample base is leisure travelers using airlines and hotels in 2009)

- % of people using the web was 53% of people in 2002.  That number has increased to 66% by 2009.

...and the % of people using the Web to book travel is also a majority
- 35% used the Web to book travel in 2002.  56% of people used the web to book by 2009.  BUT, the % using the web to book has been flat from 2007-2009.

... what do people think is important on a Web site
- 87% lowest fares and rates
- 74% easy booking
- 72% photos
- 46% user reviews

...the next generation of search is meta-search sites like Kayak that search a large number of travel sites for rates, availability and more and let people compare
- only 5% of travelers use meta-search today.

...Meta-search powered price shopping will make it more important to build equity into a brand
- But consumers today care less and less about the brand. 
- A survey asked people when they fly whether they prefer to use a legacy carrier that they have used before, a low fare carrier or had no preference.  21% said a legacy carrier; 29% said the lowfare carrier; 50% said they had no preference.  So half of consumers didn't care about the airline brand.
- A survey asked people how important the lodging brand name was.  57% said the brand name was very or extremely important in 2006.  That number has dropped to 44% in 2009.  So brand importance is dropping for hotels.

... blogs and advisory/review sites are increasingly important.
- 19% use blogs and advisory sites today to plan travel.
- 1/3 of next generation, younger travelers use them.
- What do they use?  42% use YouTube, 33% use Facebook, 30% use MySpace, 27% use TripAdvisor.

Escapia Trip to Sunriver, Oregon

By Mike Zaroudny, Escapia Sales

Fresh back from my honeymoon, this week I headed south to Sunriver with our VP of Sales, John Suzuki to host the Oregon Vacation Rental Breakfast Seminar at the Sunriver Resort on Wednesday.

When I met John at the airport I was pleasantly surprised to learn few things:

1. That members of our development team including our CTO, Melissa Yang, had piled in a car and had driven down the night before to spend time in the office of Escapia client Discover Sunriver.

2. We were staying in a fantastic Discover Sunriver vacation home at the resort.

3. We were all going to Maverick’s Tuesday afternoon to ride something called the "Flowrider".

I quickly learned that the Flowrider is a man-made turbine propulsion wave you ride on a surf/skim board. The kids that worked there made it look easy but we all quickly found out that it was not! Ross Yearsley, a member of the Escapia development team (pictured below) quickly got the hang of it and others, like myself, didn’t fair as well - narrowly missing a trip to the ER. Our host Larry Browning of Discover Sunriver even made his first outing on the Flowrider and looked rather impressive! We all had a great time - thank you Larry!

Ross Yearsley of the Escapia Development team conquering the Flowrider!

On Wednesday morning John and I hosted the vacation rental breakfast seminar to a full house at the Sunriver Resort. The energy was great and the crowd was very engaging. Between the Mavericks, the Flowrider, office time with Discover Sunriver and the Vacation Rental Seminar - we all had a fantastic trip to Sunriver visiting with clients and prospects.

Ross, Ryan, Mike, Peter, Melissa and Tong of the Escapia Development team visiting Discover Sunriver.

This Week on the Web...

By Kris Lande, Product Marketing Manager

Here's my round-up of interesting travel industry tidbits and links from the Web this week.  It seemed like a quiet week in travel & vacation rental news - let me know if I missed something by leaving a comment.

Forbes lists the 10 most 'kid-friendly' cities.

Are there now too many choices for online travel shopping, causing overwhelm for consumers?  CNN wonders if travel agents could be making a comeback. 

Everyone is talking about JetBlue's 'All You Can Jet' pass: $599 for a month of unlimited travel from September 8 - October 8.  Will you be partaking in this deal?

This weekend is the last 'fee-free' weekend at national parks, even Obama is taking advantage!

This Week on the Web...

  By Kris Lande, Product Marketing Manager

Like many of you, I spend lots of my time on the Web.  Reading industry blogs, checking out travel news, keeping on top of technology trends and, of course, looking at vacation rentals.  I'd love to share some of the things I come across with you... so introducing my 'Week on the Web' - a weekly round-up of posts and tidbits on travel and vacation rental news from the week.  Enjoy!

This week on the Web...

TripAdvisor shares their top ways they help travelers get the most 'bang for their buck.'  Yes, vacation rentals make the list!

Getting lots of last minute bookers? Midgett Realty is.

Escapia makes the Wall Street Journal list of Ten Travel Start-Ups That Raised Funds In 2009.

How to use social media to make your travels easier.

HomeAway announces the winner of their 'Save Our Summer Vacation Contest'. 

FlipKey shares some inexpensive tips for dressing up your vacation rentals.

Blue Tent and Escapia create an awesome new site for Akumal Direct. 

Time Magazine released it's '50 Essential Travel Tips.'

Traveling with Fido?  Check out the top 10 pet-friendly cities.

Yield Management - Its Time Has Come

By Steve Murch, Escapia Chairman

"Yield management is the single most important technical development in transportation management since we entered deregulation."
    – Robert Crandall, former Chairman/CEO, American Airlines

Yield management, now a pervasive and accepted practice in nearly every segment of the trillion-dollar worldwide travel market, has recently generated considerable interest and varied opinions within the vacation rental industry.

I wanted to take a minute to share some of my thoughts on why we here at Escapia think it’s such an important topic, and why, even though we've got a pretty good lead in the industry for yield management tools today, we'll continue to invest and innovate in for you.

What Is Yield Management?
Yield Management, broadly defined, is the practice of influencing consumer behavior, generally through pricing, in order to maximize the overall profit (or yield) from a fixed, perishable resource over time.

Wikipedia notes that three critical ingredients for yield management to work are:

• Fixed resources
• Perishable inventory
• Customer willingness to pay different rates at different times

For all practical purposes, I'd add a fourth:

• Tools to easily manage rate changes and updates throughout the distribution channel and product lifecyle – from the internal backoffice through all sales channels used. 

This is because it's simply not manageable to constantly adjust rates based on supply/demand without some degree of automation.

We've certainly got the first three elements in the vacation rental industry.  And with EscapiaONE's IntelliRate engine, you have the fourth.

I believe the stage is set for more sophisticated yield management to start gaining more and more adoption in the vacation rental industry; this is due to a variety of market factors.

Consumers Expect It
From the consumer’s point of view, it’s become not only logical but expected that the  premium beachfront lodging on Maui booked for April should carry a premium, especially if it's the last one left.  And it's also expected that the inner cabin on a cruise that’s only 60% booked and sailing tomorrow should be a steal of a deal.  It's expected that those rates can (and often do) change, right up until booking is confirmed.

Even in most grocery stores, it's expected that seafood is more expensive when it is fresh off the truck than when there are too many to sell-out and they are nearing their perish-point.  At hotels, deals are expected when occupancies are low, and premium pricing is expected when demand is likely to outstrip supply.   (The Hotel Marketing Association's perspective on yield management indicates that they, too, believe its time has come, as indicated by their widespread adoption of REVPAR, revenue-per-available-room, and not occupancy, as the primary financial performance statistic.)

In fact, yield management is now so common in the travel industry that the converse -- that is, static pricing for airline seats, rental cars, or lodging throughout the year, regardless of demand or availability -- now would seem somewhat absurd.  Can you imagine United Airlines issuing a yellow-pages-thick printed directory of their prices every January?

These consumer expectations carry over into the vacation rental industry.

Yes, there was a time, last seen about the time JFK was in office, when static pricing ruled the day in all segments of the travel industry.  But even when it was the norm, I'd argue that it wasn't because it was the best economic strategy to maximize profits and also customer satisfaction; it was simply a product of necessity. 

Today, those constraints are gone, and new opportunities are presenting themselves.

Got Malasadas?

By Kris Lande, Product Marketing Manager

As you know, at Escapia we’re big believers in the power of reviews from past guests helping people discover little gems – whether vacation rentals or restaurants.  Every once in awhile we come across such places in our travels that we just have to tell you about... 

One gem in particular is Leonard's Bakery in Honolulu. Honestly, don’t think about it - just go.  You won’t regret it.  John Suzuki used to live in Honolulu, so he knows all the great ‘local’ spots that aren't on the normal tourist circuit.  He takes us here each time we are in Honolulu for Malasadas (kind of like beignets but softer and doughier).  We went this morning for a morning Malasada treat to start off our day.

If you are interested in more reviews of Leonards, check out their TripAdvisor review. It is rated #2 of 1,064 restaurants in Honolulu.  And, it isn’t even a restaurant - it’s a bakery, that’s how good it is!

Leonard's Bakery is a perfect example how the Web can have a powerful force on a small business.  With a quality product even small 'mom and pop' shops can end up with top ratings on the Internet, driving customers to them they would have otherwise never had.

Come to America!

By Bill Furlong, CEO

When traveling around the country visiting with vacation rental managers, I hear from time to time about the impact from overseas visitors renting vacation homes.  So I thought it would be interesting to see how big a factor that is for vacation rental companies by looking at what the data says across tens of thousands of bookings done using EscapiaONE.

The answer -- overseas guests are a surprisingly small percentage (at least compared to my expectations).  Then again, what the story is depends partially on how you look at things.  The first takeaway is that during the first half of 2008, only 2.8% of guests staying in U.S. vacation rentals are from outside the U.S. --that little sliver of red in the adjacent chart.  Now, certainly some managers see a much higher percentage.  The data here is from hundreds of companies with thousands of bookings from coast-to-coast.  Still, 2.8% is pretty small.

But when you look at the year over year change, you see a different story.  The percentage grew from 2.2% in 2007 to 2.8% in 2008.  That's pretty healthy growth.  If fact, if you really want to get frothy on interpreting the overseas growth, consider that an increase from 2.2% to 2.8% equals a 27% growth in international share in a single year.

Despite that, not enough visitors are coming to America -- at least in the eyes of the Travel Industry Association.  According to TIA data, fewer overseas visitors came to the U.S. in 2007 than in 1997. 

The culprit?  Well, the cost is certainly not one of them.  In fact, for most non-U.S. travelers, America is a great way to stretch your travel budget.  Consider the graph on the right of the exchange rate between the Euro and the U.S. Dollar over the past two years.  The Dollar has gotten almost 30% cheaper for Europeans since late 2006 -- which means that the place they stay in American has gotten 30% cheaper, too.

Outweighing that cost savings, according to the TIA, is the perception of an unfriendly reception at U.S. customs and immigration posts as well as sense that getting a U.S. visa is time consuming and difficult.  And the past few years haven't been particularly kind to the U.S. "brand" in the eyes of the rest of the world.

The TIA feels that more work (and spending) is needed selling the U.S to potential overseas visitors.  One part of that is launching a web site promoting travel to the U.S.  You can check out the new U.S. web site at www.discoveramerica.com.

Who's Evaluating You?

By James Sells, Director of Client Services & Installation

Research is showing that consumers are looking to the opinions of their peers more and more to inform their purchasing decisions (full article here). This is proving especially true for online transactions where the consumer can only see what is on the screen in front of them.

It's no surprise that travel and recreation is the most highly researched service by online shoppers, even topping electronics, at a whopping 82%.

Further, this same research is showing that the average consumer (44% of all surveyed) needs to see between 4 and 7 reviews before they make their final buying decision, with another 22% needing to see 8 or more reviews and testimonials.

Back in April of this year, Escapia launched its Ratings & Reviews program which is free for all EscapiaONE subscribers. This program allows your guests to be surveyed upon checkout with a brief, non-intrusive survey about their stay, and the results can then be managed within the EscapiaONE system. These Ratings & Reviews are also dynamically featured on ClearStay to give consumers the confidence they need to book a stay in one of your units.

To date Escapia has collected over 15,000 reviews for vacation rental agencies and the results have been overwhelmingly positive. With a total of 5 stars being the highest score possible, the average response has been at least 4 stars for each category.

Overall satisfaction                   4.5
Services from rental manager     4.5
Cleanliness                              4.4
Location                                 4.6
Property condition                    4.3
Recommend to Others              92%

The information from guest reviews can also be used to;

• Measure and track your overall customer service score as a company.
• Instill confidence in potential guests by putting quotes from past guests on your website (EscapiaONE users can copy and paste quotes into their web content management tool.)
• Show your owners why they made the right choice by choosing your agency and include guest quotes in your owner statements or owner newsletter.

As technology and the internet head into Web 2.0 and create a more integrated and immersive experience for users and consumers, confidence and reliability are going to continue to be key components for companies that wish to thrive in this new age.

Back from Tijuana - God Bless America

By John Suzuki, VP of Sales

I’m back from my eight day “vacation” in Tijuana and thought I’d take a moment and share a bit of my life with you from last week.

My 16 year old daughter and I just got back late Saturday night from our trip to Tijuana where I helped lead a group of 80 teenagers to build eight houses for eight families. My goodness, what an awakening experience. It certainly made us all appreciate what we have, and made us realize how privileged we are here in America!  Below is an example of some of the more “established” residences. We were there to help the poorer ones.

While it would have been fun to build vacation rentals :) the 12’x24’ houses we built offered basic shelter for the families we served. It was one of the most heart-rendering experiences of my life and I was honored to have been part of it. I suspect it’ll take me a couple of months to process it all, but in any case, I’ll probably be going back again next year. To see more pictures from this mind-numbing yet life-altering experience, please check my photos on the Escapia Flickr photostream. Talk to you soon…