What a promotion reveals about how Airbnb sees resort rentals

Next-generation hospitality company Airbnb has been running an old-fashioned hospitality promotion to try to grab a bigger slice of the rental market in traditional resort areas.

This October, the lodging-rental company has been touting a deal that reads like this: “First-time Airbnb guests get $100* off homes in 13 of North America’s best ski destinations when you book by Oct 29.”

What’s notable about the promotion is that it isn’t aimed at Airbnb’s stereotypical listing of an urban property where the host lives on-site.

The deal aims to drum up business at traditional resort spots worldwide — in this case,  ski destinations like Aspen, Jackson Hole, Stowe, and Whistler.

The promotion suggests how the company thinks about the market. It thinks in terms of geography rather than demography.

Airbnb defines the market difference as traditional resort spots versus urban or suburban areas, instead of as professionally-managed listings versus self-managed ones. It has its teams looking at activity in areas such as  Bali, Cape Cod, Hawaii, Provence, and so forth with a separate approach to the ones looking after, say, Paris.

Michael Endelman, who helps lead Airbnb’s North American vacation rentals team, recently sat down with Tnooz to offer a wide-angle shot of the company’s approach.

A couple of years ago, Airbnb realized that resort areas have a different type of host and a different type of guest, he says. So it created a “sub-team” to better serve resort areas. They tweak the company’s product and marketing to gain share, with a goal of quadrupling its nearly half-a-million resort area listings.

Airbnb estimates that close to 70% of its property managers in vacation rental markets have fewer than 10 listings. These are typically small local businesses, says Endelman, rather than big property management companies. He adds:

“This typical host profile fits well within Airbnb’s brand values. They contribute to the local economy and they have the ability to act as local ambassadors to guests.”

As long as the professionals are managing only a handful of listings, the company thinks of them as being similar enough to single-property renters as to be treated largely the same.

Getting keyed up

Airbnb has been doing API integrations with a few vacation rental property management system companies, such as Kigo. Perhaps the biggest such deal has been with LiveRez, which claims to be most widely used cloud-based software for professional vacation rental managers.

In another move, the startup has changed its cancellation policies. In 2015, it began offering vacation rental property managers in resort destinations the ability to get paid out 30 days or 60 days before a guest’s arrival.

That policy for resort areas contrasts with Airbnb’s customary practice of taking a guest’s payment at time of booking and holding it until the payment becomes non-refundable (usually in a short window before arrival or after the first night’s stay).

The company’s original cancellation policy hadn’t worked well for many resort areas that face brief peak seasons, which necessitate a longer lead-time for bookings and a lowered tolerance toward last-minute cancellations.

Endelman believes that the PMS integrations will help speed up adoption of its platform by property owners in resort areas. Being on a PMS lets an owner see all of their inventory information be up-to-date and sitting side-by-side with reservations coming through other channels.

The PMS integrations, changed policies, and marketing promotions are all recent signals that Airbnb is looking to ramp up its inventory of properties where hosts usually don’t live on premises and are typically professionals who manage multiple units.

Such a move will bring it more onto the turf of rivals like Expedia-owned HomeAway and TripAdvisor-owned Flipkey. Until now, competition has been muted. Some estimates have suggested that Airbnb’s traditional vacation rental listings overlap only 12% with HomeAway’s core listings, for instance.

Endelman thinks Airbnb’s overall offering is competitive and distinctive from what else is on the market, such as by enabling free listings and by keeping the host fee relatively low.

He doesn’t think the core product caters too much to urban listings. He counters that all of the hosts have access to options for adjusting the types of reservations they are willing to accept, such as whether to accept same-day bookings and what minimum-length of stay requirements might be. Customization like that enables all types of owners to find what works for their circumstance, he argues.

Endelman had no comment about rival companies. But the context will be clear to many readers. Erstwhile rival HomeAway recently introduced a fee that sparked some anger (with more than 300 comments on a recent Tnooz article about the topic), though parent company Expedia says that its material business hasn’t declined.

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