Everyone agrees that the vacation rental industry is in a state of evolution, if not revolution. But one that increasingly resembles a classic Western movie.
Money is sloshing around, leading to the creation and aggregation of technology providers and distribution channels, putting pressure on property owners and managers to make increasingly complicated decisions about property presentation and selling.
The discomfort caused by all this is palpable at the Vacation Rental Managers Association conference in Texas.
A major topic of discussion, both on stage and off, is distribution of property information and inventory, fueled by the announcement by VRMA and Pegasus to build a distribution switch, and by the presence of a much bigger HomeAway after its recent acquisition of Escapia and Instant Software.
At the end of the first full day of the conference, VRMA held an hour-long town hall.
A majority of the questions were about the switch – who supports it, who doesn’t, who’s designing it, how will it work, etc, etc.
Earlier in the day, VRMA had put up a slide listing property management companies that had pledged to support the switch initiative.
Missing from the slide were Homeaway’s two property management systems, something immediately noticed (and tweeted) by attendees.
At the town hall, an attendee got up and asked the obvious question: “So do we give HomeAway the cold shoulder or do we go have a beer with them?”
HomeAway held its own town hall meeting later in the evening, and the switch kept rearing its conceptual head.
Carl Shepherd, HomeAway co-founder and chief strategy and development officer, expressed some skepticism about the switch project, indicating (accurately) it is a complex undertaking not to be taken lightly.
When asked about Homeaway’s support, Shepherd said HomeAway had only been notified of the switch initiative via letter the previous week, so felt it wasn’t fair of VRMA to ask for their support for something about which they had no information.
That brought a passionate rejoinder from Alex Risser, current chair of the VRMA board of directors.
Microphone in hand, he reminded the executives of Escapia and Instant Software of a meeting they attended regarding the switch back in January of this year, and accused Shepherd of misrepresenting the facts and of acting in bad faith.
The room was very quiet indeed.
Conversations with attendees about all this turned up a range of emotions from fear to skepticism to disinterest.
“We have an eight-week summer season that fills up with repeat renters so we don’t distribute,” says one property management company executive, “but we’re developing an off-season program and will have to find new channels to fill that.” She’s in the process of searching for a new property management system, and is fan of Flipkey, not HomeAway.
“It’s like junior high,” says another attendee, “with everyone jockeying for position. Who knows what the landscape will look like in a year?” A common refrain was that if HomeAway didn’t support the switch, it wouldn’t succeed.
Also heard was some concern about the underlying financials. “Margins are already so thin in this industry,” says the CEO of a niche distribution channel. “Adding a transaction fee in many cases will be difference between meeting costs or not.”
It is worth noting that, officially, HomeAway is making all the right noises.
“We know Mike Kistner and have worked with Pegasus,” says Shepherd in a written statement. “There is no reluctance in working with the company. HomeAway considers the business model for the switch, which has yet to be defined, core to our ability to make a final decision to participate.”
“The technological challenges of creating a switch for this highly fragmented and diverse industry cannot be overstated, but the chances for success have been made greater by the selection of a company with Pegasus’ credentials.”
On its relationship with the wider vacation rental community, Shepherd adds:
“More than 3,000 professional managers, including most of the members of VRMA, choose to advertise on HomeAway websites. We believe this is the ultimate expression of support for HomeAway and all we do to increase the number of travelers staying in vacation rentals.
“While we understand the concern some professional managers may have, the majority of managers I have spoken to at VRMA express support for our acquisition of Instant Software and Escapia and hope that HomeAway can help them become more efficient in the future.”
The only certain thing in the vacation rental industry this week is uncertainty.
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About Valyn Perini
The paid listing model will (eventually) come crashing down, as it has in most industries that started with paid online listings. The proposed switch is just another piece required for the free model to take hold. Free is free, and sites like rentalspot.com will continue to gain share.