Are we about to see another major shift in the vacation rental industry? Shower thoughts from this years VRWS

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The VRWS was hosted in Florence this year and as usual was well organised and had a great range of speakers including staff from Booking.com and Airbnb.

Attended by over 200 people, with both managers and owners from around the world, the auditorium was well attended despite the great opportunity for people to network throughout the days.

In recent years many of these conferences, from the famous San Diego VRMA meeting of 2014 to the increasing number of local groups have been weighed down by frustration and anger.

This has been directed at the overpowering emergence of certain OTAs and the change to some of their business models which have dramatically changed businesses around the globe.

Somethings in the air

Reading online forums, having private correspondence and attending conferences illustrates the disappointment of these changes in the traditional rental community but also a creeping acceptance of the developing status quo.

It’s only a feeling, but after hearing Robin Clifford make a well thought out Airbnb presentation, perhaps we are about to see another major shift about to happen in this market or an acceleration of current change.

There are 3 main elements that are facilitating this shift

1. Technology:  We are seeing deeper integration of devices for home control and monitoring, new tools for guest communication, apps and suppliers of tours trips, home supplies and much more. Vanessa de Souza Lage presented on this subject which also emphasized the speed and diversity of the rental future powered by tech.

2. The guest experience: As Alan Egan said in his presentation, “there is no point advertising your en-suite anymore”. It’s not only millennials (we need to stop using this term), the whole world wants an “experience” and EXPECTS quality accommodation and hassle-free service.

3. Sharing:  Forget the sharing soundbite at accommodation level and think sharing at a company and data level. There are specialist companies everywhere who are developing great mobile cloud-based tools that can be very useful.

Some are practical and assist in business necessities such as cleaning schedules and maintenance. Then there are the extras such as online guest books, real-time advice on travel situations, remote door entry systems, fridge filling and tours and local experiences among many. In fact, the startup competition at the VRWS was won by a guest experience app “hellhere”.

For any of these to work, however, they need booking data, reservation information and personal information. Marketplaces rule! Interestingly there was also the entry of Blockchain tech to the presentations, perhaps a means of future disruption of global marketplaces!

Connect or die

Those companies who do not have the resources or attitude to connect to suppliers of expert and the most dominant peripheral systems will see less interest in their core products. Those who choose not to share and prefer to keep all information within their own data silos will suffer.

However, expect the giants of the industry to keep watch and acquire the best but distance these brands to keep them as apparent independents much like the major hotel metasearch engines are.

APIs Rule

Currently, the world of APIs (application programming interfaces), which provides a way for different systems to talk to each other, is expanding at a rate of knots as companies connect to each other and to the dominant OTAs.

In future data will continue to flow between systems for all manner of reasons, but this will begin to iron out the suppliers who can and those who can’t or won’t share connections. The inventory managers who cannot adapt will also suffer and become bait for the larger companies.

It’s a horribly imperfect world right now on data exchange, which will see more standardization on the one hand and then being disrupted on the other by niches and perhaps Blockchain.

Will the big will get bigger?

After listening to Airbnb and hearing commentary on Booking.com, it’s clear that current ambitions are far above what could ever have been expected. HomeAway/Expedia was not present as the other big player in the game, nor was TripAdvisor, but they are losing ground by the looks of it.  Perhaps we will see more consolidation soon!

Airbnb testing their own apartments? The whole nine yards?

Now with their own test brand accommodation, or their Select brand of audited accommodation and perhaps even flights, Airbnb, despite the endless city news and restrictions are powering ahead.

Airbnb is creating a complete eco-system all of their own they control. Would it be wild to expect an unmanned car service with all elements of your travel controlled from your phone?  Home pick-up, flight, stay, trip, eat, flight, airport pick-up, home…..review and reward.

Now showing a deep interest in quality serviced accommodation (e.g. purchase of luxuryretreats.com) supplied by managers, this is the only wrinkle in their full-service approach.

All bookings need an end to end service which needs to be secured quickly and all scheduled accordingly. Managers, certainly in regional destinations, are often better placed to ensure accurate information and instant acceptance and also offer alternatives in times of property problems.

So is the Airbnb brand franchise or license on the horizon?

After all hotel chains are now circling the alternative accommodation space. Hyatt , other such as Hilton and Wyndham already have resort experience and Accor owns VR businesses.

Say goodbye to “live like a local” and hello to the “full service stay” and new brands.

“Managers” may become maintenance men

When is all the marketing is in the hands of multi-nationals and external services are supplied by contractors, organised via apps, then what is left?

Managers who have been undertaking all the needs of an owner including marketing, pricing, complaints, cleaning, repairs, filing accounts and more may need a rethink, especially the small ones!

Just cleaners then? Even that may not be the case. Sébastien Grosjean of BookingSync jokingly suggested robots can do that. He’s probably correct in a few years. It’s maintenance then, but even now some companies have their eyes on that segment, Keepe for example!

Fake personal service

Imagine being a guest and turning up at the holiday home of your dreams. The lights are set to dim, the heating has been primed, your favourite music is playing. The coffee machine grinds some beans and starts to percolate.

The guest arrives, Alexa speaks up, welcomes them and then tells them the weather next day will be fine and ideal if anybody enjoys fishing, as the trout are on mayfly right now and a good time to catch them is early evening, just across the field.

How did that happen? No, nobody pitched up to do this prior to the guest’s arrival.

They were tracked on their phone, 20 miles away, estimating the ETA based on the traffic congestion, the home systems were set up automatically, the keyless door entry lock was set.  The music choice and fly fishing hobby was sucked out of a commercial dataset that holds all your interests, likes and dislikes!

Not a person in sight!

The 25-year-old of today: Dream or nightmare?

The 25-year-old of today, who in 5-10 years buys a second home, may sign up to an OTA via his or her phone, take advice on furnishing from their deep data success stories, then purchase the furnishings from their recommended suppliers.

A recommended photographer appears and uses the keyless door entry system. The owner signs an online contract with the OTA, adopts the brand name under license, and pays the insurance fees and accepts the quality directives. Online listings are set up by machine learning.

All else is organised via the owner’s phone for all the other supplementary and practical services. Marketing is shared among 2 or 3 massive OTA’s, money arrives in owners account! They didn’t speak to a soul!

It’s a fully automated micro branded hotel! If Elon Musk has his way, it could even be on Mars!

Is a decentralised world the answer?

Or perhaps we live in a decentralised world and the owner signs up to a network of marketing options, not just a big 2 or 3 OTA’s and all services are linked to these systems too.

Think of a world with a global and public database of holiday rentals, hotels, tour operators, flights and much more, which allows permissionless innovation of applications that can build by next Airbnb or Booking.com – however, it’s built and governed by the people, for the people with fractional fees. Disintermediation at its best!

There’s a company working toward this goal. They’re called Winding Tree and we suggest you check them out.

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