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HomeAway Software | 2019 US Vacation Rental Trends Report


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HomeAway Software
2019 U.S. Vacation Rental Trends Report

As vacation rentals reach a wider audience, rising traveler expectations are inevitable.

But U.S. property managers who build trust, prioritize experiences, promote safety, operate efficiently, and adopt new technology have a real opportunity to both meet and exceed these expectations.

Forward-thinking property managers are already starting to reap the rewards. 3 out of 4 HomeAway Software customers grew their revenue over the last 24 months, and we expect that number to rise in 2019.

In the words of Maya Angelou: “People will forget what you said. They will forget what you did. But they will never forget how you made them feel.”

Vacation rentals have the ability to deliver unique, personal travel experiences that hotels and other traditional forms of lodging just can’t match.

Keep up with the times, but don’t lose sight of this inherent advantage to win in 2019 and beyond.

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HomeAway Software | 2019 US Vacation Rental Trends Report

  1. 1. 2019 U.S. Vacation Rental Trends Report ®
  2. 2. Introduction The numbers are in, and the vacation rental segment is looking stronger than ever: U.S. revenue hit over $13 billion in 2018, with a projected annual growth rate of 7.2%.¹ Property managers nationwide are uniquely positioned to get in on this growth, and they’re showing early signs of optimism. In an annual customer survey from HomeAway Software® , over 80% of respondents felt “extremely positive” or “very positive” about their company’s overall business outlook in 2019.² However, as private accommodations go more mainstream than ever, they are increasingly competing with hotels and other more traditional lodging options.³ While increased demand is great for business, there is one major consequence of this larger reach: rising traveler expectations. Meeting these expectations will be the name of the game in 2019, and property managers who do so in a cost-effective way will be positioned for significant growth. What does meeting traveler expectations look like? We gathered recommendations from 17 leading experts across the vacation rental industry. Five critical themes emerged: 1. Instilling trust 2. Crafting experiences 3. Prioritizing safety 4. Simplifying operations 5. Incorporating technology Read on for a deep dive into each key area, including actionable strategies for 2019 and beyond. 1 Statista 2018, “Vacation Rentals - Highlights, U.S. Region” 2 TechValidate survey of 155 U.S. HomeAway Software users, September 2018 3 VRMB 2016, “By 2020, Vacation Rentals Will Topple the Hotel Industry”
  3. 3. Meet the Experts Henry BennettMatt BareAlex Nigg Yan ZangChris Carnicelli Richard Lang Paul Hanak Peter ScottSusan BlizzardMissy Zak Jeremiah Gall HomeAway Software wants to thank all the contributors for their thoughtful and insightful contributions. Pictures have been included for all partners who are quoted in the 2019 U.S. Vacation Rental Trends Report. To learn about all of HomeAway Software’s partners visit
  4. 4. Websites will incorporate more advanced trust signals. When asked to identify which technologies and solutions were most essential for business growth, a whopping 82% of HomeAway Software customers chose websites—beating out tools for reservations, maintenance, housekeeping, and more.4 Travelers need to feel confident that their purchase will meet expectations, and websites are a major component in fostering that trust. According to Missy Zak, marketer and account manager at Ascent Processing, the #2 U.S. chargeback reason code of 2018 was “Not As Described.” A problem that can often be combated with better online descriptions and photos of the home. New technologies are emerging to help with this process (details below), but the end goal should always be to present properties truthfully and thoroughly, highlighting guarantees and other safeguards throughout. Properly CEO Alex Nigg elaborates: “Trust is the biggest issue for the vacation rental industry right now. Travelers feel like they never know what they’re going to get when they stay in a vacation rental.” Accurate information builds trust, encourages repeat bookings, and saves costs by reducing the number of customer contacts. Google is also making moves to prioritize trust. Paul Hanak, Director of Digital Marketing at ICND, reports that focus is shifting from user experience to the E-A-T principle: Expertise, Authoritativeness, and Trust. “A recent algorithm update demoted websites that didn’t seem trustworthy, despite the fact they had loads of information and content on their respective topics. Google has not specifically stated that E-A-T is a ranking factor, but it’s evident they’re putting more weight into the trustworthiness of websites.” How can you use this to your advantage? “Use trust signals on your website, especially your ‘About Us’ page. Team photos, smiling faces, guest reviews, and community involvement are all great examples to instill trust in your visitors—and ultimately win Google’s trust as well.” Reviews will increasingly help or hinder conversion. Chris Carnicelli, CEO of Generali Global Assistance, shared a 2018 study revealing the top three decision- making factors for where U.S. travelers will stay: • Location (63%) • Value (57%) • Online reviews (33%) – which increased from 31% in 20175 And HomeAway data indicates that just going from zero reviews to one review can increase conversion by 40%.6 Reviews clearly play a huge role in earning traveler trust and driving bookings. In the new year, do a thorough inventory of your review status by property, and consider implementing new processes to collect and manage feedback. A Rezfest™ 2018 panel of leading property managers7 provided several ideas: • Contact every guest for additional feedback, and let the guest know you’re the property manager—it changes the tone and often results in a more honest conversation. • Reach the guest before they complete their reviews to immediately address any issues and encourage positive written reviews. Make it real for the guest that their reviews significantly impact the owner. • Respond to each and every review, even if it’s just a one-word answer. Travelers want proof that you’re listening. If you fix an issue, circle back and provide an update on the original review. Matt Bare, Founder of Q4Launch, suggests highlighting positive reviews that you receive from guests on social media: “This is a great way to highlight the features of your business without sounding too ‘salesy.’ At the bottom of the post, politely ask readers to leave a review.” The push for secure, convenient payment will intensify. Never underestimate the importance of secure payment. A survey by eConsultancy found that 58% of respondents left the checkout page due to concerns about payment security.8 Online travel agencies have already invested heavily in secure payment options, and independent websites must follow suit or risk significant drop-off. What’s an independent website to do? First, clearly describe your secure checkout process, highlighting any security technology you have in place. Include features like tokenization or two-step verification. If you’re working with a reputable third-party payment vendor, name-drop their services to instill extra confidence.9 Certifications can help communicate legitimacy as well. Display SSL security certificates, Better Business Bureau seals, and any other certifications that build confidence in your online payment processes. More and more travelers also expect Instant Booking, the fastest and easiest way for travelers to make reservations. HomeAway data indicates that global Build traveler trust through consistency, credibility, and safe transaction processing. What is Instant Booking? Instant Booking is a type of online booking that automatically confirms traveler booking requests for you. It allows travelers to book your property immediately and receive an instant confirmation.
  5. 5. 4 2018 TechValidate survey of 196 U.S. users of HomeAway Software 5 Generali Global Assistance, “Summer Travel Survey 2018” 6 HomeAway globa data 2018 7 HomeAway 2018, “Rezfest 2018 Spotlight: How to Build Lasting Owner Relationships” 8 Neil Patel, “9 Ways to Make the Payment Process Easy for Online Customers” 9 Payoneer Blog 2017, “8 Ways to Build Client Confidence in Paying You Online” 10 HomeAway global data 2017 11 Skift 2018, “Decoding the Modern Vacation Rental Technology Landscape” 12 Forbes 2018, “Here’s How Much Instagram Likes Influence Millennials’ Choice Of Travel Destinations” listings with Instant Booking have a 40% higher booking conversion rate than non-Instant Booking listings.10 With all of the right trust indicators and property details in place, consider taking advantage of Instant Booking to attract more guests. Experiential marketing will draw in more travelers. Skift Research indicates that U.S. travelers “increasingly value experiences over hotel rooms and find that vacation rentals can better deliver unique activities.” Comparing 2017 to 2018, the willingness to spend more on a nicer hotel dropped from 41% to 33%, and the willingness to spend more on activities grew from 59% to 67%.11 Vacation rentals have a real opportunity to capture experience-focused travelers, and “content is king” still rings true. Peter Scott, President at Bluetent, suggests: “expand your strategy to include informational content based on search queries for activities, events, and things to do in your area.” Leverage your local expertise and grow your brand, accelerating website traffic in the process. Websites aren’t the only opportunity to highlight the experiential elements of your property offerings. A recent survey found that more than 40% of those under 33 prioritize ‘Instagrammability’ when choosing their next holiday spot.12 Remember to market the destination and surrounding areas on social media just as much as the property itself.
  6. 6. Share experiences and in-destination solutions to delight guests of all types. Property managers and owners will up their activities game. While pre-trip experiential marketing is paramount for drawing in new customers, actually delivering on quality experiences post-booking is equally important. And property managers are taking note. In HomeAway Software’s early 2018 survey, the #1 goal for U.S. property managers was “increasing revenue,” beating out “providing outstanding guest experience,” “increasing property inventory,” and “helping property owners make more money.”13 But when surveyed again in late 2018, “providing outstanding guest experience” rose to the top.14 As Scott explains: “With higher expectations to vacation like a local, the experience is just as important as the inventory, if not more important.” So personal communication is key: “Vacation rental managers should showcase their brand and local area knowledge as soon as a reservation is confirmed by using automated, personalized messages. Send emails that include all the necessary property information, interesting attractions, and special offers to deliver a seamless vacation before, during, and after a guest’s stay.” Luxury travelers will get in on the action. Affluent travelers are seeking out more and more experiential travel. Instead of investing disposable income in pricey hotels, they are investing more in experiences—good news for activity-friendly vacation rentals.15 A 2018 Skift Research study found that 50% of high- income U.S. travelers had stayed in a vacation rental at least once, up from 36% in 2017.16 One reason for this increase according to the report: “If they are able to spend less money on more interesting and memorable lodging, then they have more to allocate toward other activities” (attractions, tours, dining, and more).17 But as vacation rental adoption steadily grows, satisfaction appears to be decreasing. Skift Research writes: “With higher usage, comes higher expectations.” 47% of survey respondents said they were ‘very satisfied’ with their vacation rental experiences, down from 60% last year.18 Property managers who crack the code and deliver on curated experiences can win the loyalty of one of the most powerful traveler spending segments. Consider targeted marketing campaigns and invest in the right amenities to wow these potential guests. Then, collect feedback before and after each stay to ensure you’re meeting the wants and needs of luxury travelers coming your way. In-destination solutions will vie for attention. With the focus on experience rising to the forefront, it’s no surprise that new tools and solutions are popping up to help property managers cash in on this growing traveler trend. 2018 research from Phocuswright indicates that investors are betting on in-destination startups as the next breakthrough segment.19 Expedia Group predicts that “insiders” will help travelers have more real, local experiences in 2019: “Locals are offering insider tours, and global companies are partnering with local players to up their authenticity (and to tap into the tour guide market valued at $7 billion, according to a November 2017 IBISWorld report). Startups, new partnerships, and seasoned players will jockey for a piece of the pie in 2019.”20 Property managers should keep an eye on which solutions rise to the top, and consider partnering with experts or sharing available options to meet growing on- site expectations. 13 2018 TechValidate survey of 211 U.S. users of HomeAway Software 14 2018 TechValidate survey of 202 U.S. users of HomeAway Software 15 Skift Research 2018, “Decoding the Modern Vacation Rental Technology Landscape” 16 Skift Research 2018, “Decoding the Modern Vacation Rental Technology Landscape” 17 Skift Research 2018, “U.S. Affluent Traveler Trends 2018: Annual Survey on Travel Behavior” 18 Skift Research 2018, “U.S. Affluent Traveler Trends 2018: Annual Survey on Travel Behavior” 19 Phocuswright 2018, “The State of Travel Startups 2018” 20 Expedia Group Media Solutions 2018, “Five Trends that will Shape Experiential Travel in 2019”
  7. 7. 21 CBS News 2018, “Natural Disasters Cost U.S. a Record $306 Billion Last Year” 22 HomeAway U.S. Traveler Amenity Collections Survey 2018 23 Red Cross 2018, “Disaster Relief” 24 Hubspot 2017, “Is Your Website Secure?” Put traveler safety first, from safe transactions to safe stays. Intensifying natural disasters will prompt greater preparation. While in-destination activities can go a long way in delighting guests, none of that matters if basic safety features are lacking. 2017 hit a record $306 billion cost in U.S. weather- related disasters, and 2018 is close behind.21 Wildfires, hurricanes, and severe storms top the list of damages, and travelers are starting to take note. As natural disasters become more destructive, property managers and owners must work together to keep travelers safe. From communication strategies to evacuation details, ensure all of your natural disaster plans are up-to-date. Free tools like the Red Cross Ready Rating program can help give you a solid baseline and highlight any gaps in your plan. Safety equipment standards will rise. When asked what safety amenities were “must haves” in vacation rentals, 58% of U.S. travelers selected smoke detectors, 44% fire extinguishers, and 42% carbon monoxide detectors.22 Travelers need reassurance that vacation rentals are properly equipped to keep guests safe, and we can expect to see these amenities become a greater factor in 2019 booking decisions. Prepare your properties to meet local requirements both indoors and outdoors, plus: • Ensure amenities are placed where they’re needed most. For example, have fire extinguishers in kitchens and grill areas. • Keep your equipment safe and in working order with regular maintenance. • Include instructions to ensure travelers know how to operate your amenities. Most property managers have already worked hard to meet and exceed these standards, it’s just a matter of effectively sharing their precautions with travelers. Expect to see new tools on the market from online travel agencies, software providers, and more to help showcase safety features and ease traveler concerns. For example, HomeAway’s new U.S. Trust & Safety portal: Data protection will remain top of mind. Susan Blizzard, President at Blizzard Marketing, points out: “When the European Union enacted GDPR last spring, many companies were taken by surprise. However, it is not surprising that there is a growing trend to respect consumer privacy and safeguard data.” GDPR follows a long history of increased security expectations. “For example, if your website is not secure with an HTTPS in the URL, do not expect to get many online bookings in 2019. In a Hubspot survey, 82% of respondents said they will leave a website if it is not secure.”24 With big players like Facebook, Google, and Amazon making headlines over privacy concerns, it’s no wonder data concerns are playing a greater role in purchasing decisions. Travelers need reassurance that data provided in the booking process and beyond will be respected and protected. Visit for a free emergency preparedness tool that can help your business prepare for a variety of disasters. Take Action: Red Cross Ready Rating Program Over 90% of disasters that the American Red Cross responds to are related to home fires – and cooking is the leading cause of them.23 Fast Fact While many online travel agencies have already taken pains to ensure compliance, it’s up to property managers to keep their own websites up to snuff. Partner with web experts that prioritize safety and security to protect traveler data, and highlight your commitment to security with certified badges and transparent policies.
  8. 8. Look to hotels, automation, and smart home technology to meet new operational standards. Competition with hotels will fuel greater efficiency. As competition between hotels and vacation rentals increases, so too will cleanliness and operational standards. Property managers are already starting to feel the heat. A recent survey from Breezeway found that 33% of U.S. property managers believe managing property operations is their biggest challenge.25 Jeremiah Gall, founder and CEO, explains: “As the lines between hospitality and property management blur, and as guest expectations for quality and concierge rise, the way managers care for properties is quickly changing. Property maintenance and care requires a level of detail that puts an immense amount of stress on property operations, and managers will need to adopt intelligent technology to maintain growth.” Alex Nigg, CEO of Properly, emphasizes the role trust plays in these expectations. A 2018 survey from USA Today26 indicates that traveler trust in the sharing economy has actually decreased this year. Private accommodations can feel like a gamble: “Will the Wi-Fi work? Can I get into the property? With the right standards and tools, we can easily address the uncertainty that keeps a lot of travelers from staying in vacation rentals.” Automation will move from optional to essential. How can property managers meet these rising expectations? Automation. Yan Zang, owner at EZ Inspections, points to a research report from McKinsey & Company: “The bottom line is that 45% of work activities could be automated using already demonstrated technology.”27 Taking housekeeping as an example, technology can be leveraged to: • Auto-create cleaning and inspection jobs based on checkout schedule • Auto-assign specific cleaners and inspectors based on the property location • Notify both front and back offices when cleaning and inspections are complete via mobile apps Breezeway’s Jeremiah Gall highlights the development of data-driven tools like chatbots and workflows, as well as the importance of building operational programs that deliver on the brand promise. That promise could be luxury, accessibility, or a multitude of brand attributes: “Brand standards – a comprehensive playbook that decides how all small details should be handled – need to be leveraged by staff and service partners to ensure consistency. Detailed property care programs will be critical as private accommodations and vacation rentals enter the next phase of maturity within hospitality and drop their ‘alternative accommodations’ moniker.” Human interaction is still an important part of the vacation rental process, but Zang points out that automating routine and tedious back office work can lead to: • Greater efficiency and higher ROI • Happier, more productive employees • Better service quality (hello 5-star reviews!) ...all of which adds up to increased bookings. Smart home technology will be a bigger booking factor. According to Richard Lang, Vice President of Sales at Dormakaba: “The penetration rate for home automation is currently at 32% of U.S. households in 2018, with a predicted rise to 53.1% by 2022.28 As consumers increasingly rely on smart home technology, they will seek the same comfort and convenience when they travel.” The silver lining: travelers are willing to spend more for these high-tech amenities. Lang points to a recent VRM Intel report where 86% of millennials said they would pay more for a property outfitted with smart home technology, and 65% of boomers agree.29 Lang continues: “Security and monitoring features are among the most in-demand amenities for smart living. Consumers rank smart locks and alarms (63%), smart thermostats and fans (63%), and smart lighting (58%) as especially desirable.”30 Gall notes that the global smart-home security market is forecasted to grow to $22B by 2021,31 and managers will need to make sure all Wi-Fi enabled tools are working correctly (e.g. Chromecast, Sonos, smart locks, etc.). “There’s also an endless amount of communication with owners, service providers, staff, and guests, across a wide spectrum of channels.” Today’s market has plenty of solutions designed to help property managers outfit their properties with the latest and greatest in smart home technology. Property managers who prioritize smart home amenities should highlight these benefits in their marketing, and consider increasing rates accordingly. 25 Breezeway 2018 Survey 26 USA Today 2018, “Are Travelers Cooling to the Sharing Economy?” 27 McKinsey & Company 2015, “Four Fundamentals of Workplace Automation” 28 Statista 2018, “Smart Home - U.S. Region” 29 VRM Intel 2018, “Millennials and Technology: How VRMs Can Embrace Change” 30, “Smart Home Statistics” 31 Statista 2018, “Smart Home - Statistics & Facts”
  9. 9. Incorporate emerging technology for a competitive edge. Mobile and voice will grow in tandem. As we saw earlier, there is no shortage of operational tools built to maximize efficiency and automate repetitive tasks. Adoption of these solutions grows steadily every year, but we predict that adoption of more advanced technology will significantly accelerate in 2019 and beyond. Bluetent’s Peter Scott notes that in 2018 the number of mobile users surpassed desktop users across their 400+ professional property manager websites,32 and he expects this trend to continue as voice recognition technology usage rises. “Voice queries are the future of guest experience and search engine optimization strategies. With voice assistance, guests can receive instant answers about vacation rentals—everything from check-in/out instructions to FAQs and information on how to contact the property manager.” Blizzard points to the many competing artificial intelligence voices that have entered the market: Siri, Alexa, Google Assistant, Cortana, and even Samsung’s Bixby. “These devices are so easy to use, experts predict that in 2020, 50% of all searches will be voice based.”33 What does this all mean for property managers? Scott advises: “Vacation rental managers’ websites should have structured content for instant answers that can be scanned by voice search, and ensure that their direct-booking websites are mobile-friendly and fast on mobile.” Interactive visuals will bring in more travelers. According to Deloitte, integrating immersive technologies like virtual and augmented reality are about to become the new gold standard for shopping.34 Brand giants like Ikea, Facebook, Apple, Google, Lowe’s, Alibaba, and Amazon are all investing heavily in this game-changing technology. In fact, a research study commissioned by Google found that business listings with a virtual tour generated twice as much interest online. Plus, over half of respondents (67%) say they want more businesses to use this modern marketing material.35 The vacation rental industry is taking note. In 2018, HomeAway announced a large investment in virtual experiences. “The barriers to entry for virtual technology have never been lower,” says Ben James, Senior Product Manager at HomeAway. “Given that each one of our vacation rentals is unique, being able to walk through a property before you book helps travelers make informed decisions.” Visuals aren’t just for bringing travelers in. Once on-site, there is plenty of opportunity to turn vacation rental mainstays into interactive differentiators. Henry Bennett, CEO of YourWelcome, shares that: “At the start of 2018, video property content accounted for 10% of total property guide views across the YourWelcome network. This has grown steadily to 23% by November 2018 and is predicted to reach around 50% in late 2019.” Consider upping engagement by moving from a printed or electronic guidebook to a full video guide for each of your properties. Revenue management will transform rates. In Blizzard’s words: “The industry consensus is that if you are not having a human being use a tool to manage your rates and availability, you are missing out on up to a minimum of 25% of the revenue that you could be getting otherwise, just as is true for hotels.”36 Many companies are adding revenue managers and robust tools have emerged to help with market knowledge, competitive assessments, and rate recommendations. MarketMaker™ by HomeAway is one such tool, giving property managers an easy way to see supply and demand, events in the market, and upcoming reservations and rates over the next year. It even allows you to see forecasted occupancy and who you’re competing with based on actual traveler demand data. Expect to see greater adoption of these tools as property managers move to optimize revenue based on their unique goals, whether that’s maximizing for occupancy, maximizing for revenue, or getting top dollar for each property. Those who can balance rate goals with traveler expectations will set themselves up for success in 2019. 32 Aggregate Bluetent Client Data 33 Forbes 2017, “Optimizing for Voice Search is More Important than Ever” 34 Deloitte 2017, “Immersive Technology No Longer in the Future, It’s Here Now for Retailers” 35 VIZ360 2018, “360-Degree Photos and Virtual Tours Are Worth it, Says Google Stats” 36 Xotels, “What is the Importance of Revenue Management in Hotels?” • Schedule your shoot during busy season, between stays or in a shoulder season. No one wants to see a beach property in the winter or a ski property with no snow. • Communicating with the homeowner is key. This service is a great example of the extra value you provide. • The camera sees everything. Little details like wrinkled tablecloths can be a big distraction in the finished product. Do a thorough walk-through beforehand, ideally with a staging expert and the photographer. Preparing for your virtual tour photo shoot
  10. 10. Conclusion About HomeAway Software As vacation rentals reach a wider audience, rising traveler expectations are inevitable. But U.S. property managers who build trust, prioritize experiences, promote safety, operate efficiently, and adopt new technology have a real opportunity to both meet and exceed these expectations. Forward-thinking property managers are already starting to reap the rewards. 3 out of 4 HomeAway Software customers grew their revenue over the last 24 months,37 and we expect that number to rise in 2019. In the words of Maya Angelou: “People will forget what you said. They will forget what you did. But they will never forget how you made them feel.” Vacation rentals have the ability to deliver unique, personal travel experiences that hotels and other traditional forms of lodging just can’t match. Keep up with the times, but don’t lose sight of this inherent advantage to win in 2019 and beyond. © 2019 HomeAway. All rights reserved. If you are ready to take your business to the next level, HomeAway Software is ready to help. With over 1 million vacations booked , and over 1,000 professional vacation property management companies as customers, our software solutions have been fine-tuned to account for everything your business needs today and tomorrow. Learn how HomeAway Software can help unlock your business potential with a free consultation or product demo. | (877) 238-2287 | 37 Data based on active U.S. Escapia customer metrics pulled from July 2016 - June 2018
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