Terms of the deal have not been disclosed except to say that £2 million had been invested in the business by seed capital investors and management up to the acquisition by @Leisure, which has purchased 100% of the company.

@Leisure already owns a string of holiday rental brands including Belvilla, online portal Casamundo and Euro Relais.

Pureholidayhomes was launched just two years ago and brings a portfolio of more than 25,000 properties to @Leisure’s 300,000 strong portfolio of holiday homes, hotels and holiday parks.

The holiday rental market has seen a lot of activity in recent years with HomeAway‘s steady purchase of a string of companies including Realholidays and Second Porch just over a year ago and Homelidays in 2009, OwnersDirect in 2007 and HolidayRentals in 2005.

TripAdvisor has also been gaining ground in the sector with its acquisition of FlipKey in 2008 and HolidayLettings in June 2010.

The reviews giant also announced partnerships in November with a number of holiday rental specialists across the globe including Switzerland-based Interhome and Spain’s TopRural.

A recent report from research firm PhocusWright valued the European holiday rental market at €20 billion in 2010 with predictions for modest growth in the next two years.

The latest round brings the total invested in HouseTrip so far to almost $20 million since the company was formed in January 2010 in the UK.

Index Ventures ploughed in the first round in April this year and is leading – with Balderton – a consortium of other investors in the latest injection of capital.

The latest injection will be used for product development on the main website, boosting inventory and marketing, including expanding the site into other languages.

HouseTrip currently has around 55,000 properties on the site, just over half the number CEO Arnaud Bertrand was predicting would be included by the end of 2011 when Index made its first investment.

The company has in the past positioned itself as a competitor to the likes of HomeAway and other holiday rental platforms, by offering booking alongside listings.

But with the latest comes a new emphasis, as an “alternative to hotels”.

Bertrand says:

“At Housetrip, we strongly believe that apartments are a much better way to travel. Not only do apartments provide better value-for-money, they also enable guests to blend-in with their local environment – making their stay more authentic and memorable.”

The 55,000 properties on the system are currently listed in more than 350  destinations in 40 countries.

The reviews giant has joined forces with Switzerland-based Interhome, Spain’s Toprural, Australia’s Stayz and France-based Akena Technologies which operates mediavacances.com.

TripAdvisor has been steadily building its holiday rental offering in the past few years with the acquisition of Flipkey in 2008 followed by the launch of the channel in 2009 and the acquisition of UK-based HolidayLettings in June last year.

These latest deals make TripAdvisor much more of a global contender and a greater rival to HomeAway which has made a string of acquisitions in the rental market in recent years.

The deals enable consumers to search across all partners with results presented in a single view on TripAdvisor.

Content from the four partners will bring Tripadvisor’s holiday rental listings to 200,000 including existing inventory from its Flipkey and HolidayLettings brands.

Who and what are you (including personnel and backgrounds)?

FutureStay puts vacation rental owners in control of their own website, sales and marketing with a suite of easy-to-use online tools.

FutureStay is run by two serial-entrepreneurs from New York City with a bit too much wanderlust for our own good. We were acquaintances for years before realizing that one was managing projects for the same clients the other was developing for. We collaborated on a project together and the rest, as they say, is history.

• S. Philip Kennard – CEO/CTO: After years of running a business developing software for companies, I caught the startup bug and built my own. I founded and sold www.foundlocals.com and co-founded www.BookABottle.com, an online marketplace for NYC nightlife.
• Jonathan Fabio – CMO/Sales: Jonathan’s passion to create has lead to years of marketing consultation work as well as his first startup. He raised capital and partnered with the largest wine & spirits wholesaler in New Jersey to enhance brand programming measurability for companies such as Baccardi USA.

What financial support did you have to launch the business?

One of the perks (probably the only one) of running a software development company is free software development.

My interior designer approached me looking for a complete website and system to promote, book and manage her five corporate/vacation rental apartments. I told her that a custom solution might be over budget, and searched for a comprehensive system on the market.

We couldn’t find one that met her needs of being powerful, beautiful and affordable, so we built the first version of FutureStay for her, at in-house cost.

What problem are you trying to solve?

Despite the growth of billion dollar listing sites and socially-integrated P2P rental networks, 2/3 of travellers’ searches are still performed on Google and individual property websites.

However, most of the 10 million vacation rental properties on the market don’t have individual websites, online booking, SEO or management tools because they are simply too expensive and complicated for a part-time business owner.

FutureStay solves this problem with an easy-to-use system that lets vacation rental owners affordably create, market and manage their own website at their own domain name; complete with online booking and automated SEO tools.

Describe the business, core products and services?

FutureStay is a web-based system that lets owners and managers take control of their online presence; create vacation rental websites, manage properties, promote and accept online bookings.

Our key principles are Simple, Beautiful, Powerful and Affordable. Anyone can point-and-click their way to a beautiful and powerful website for about 10% of the cost of an old-fashioned site.

Who are your key customers and users at launch?

We’ve just come out of beta with some great and very vocal customers. Because of its accessibility and flexibility, FutureStay customers are (literally) all over the map; from hotel owners in Bangalore to bi-costal apartment managers to local B&B owners.

We listen to each of them and have added a tremendous amount of user-centered functionality as a result.

Did you have customers validate your idea before investors?

Certainly. The concept for FutureStay stemmed from client needs. We brought our expertise to the table and built a company on a demonstrated gap in the marketplace. We’re validated each time a new client sets up their own website without a single call to the office.

We’ve self-funded to this point and are starting to talk to investors.

What is the business AND revenue model, strategy for profitability?

FutureStay charges a reasonable monthly fee based on the number of properties listed. We’ve created the fastest and easiest way for vacation rentals owners to take charge of their online presence. Now our strategy is to increase awareness.

SWOT analysis – strengths, weaknesses, opportunities and threats?

Strengths:

• Our system has been powering various types of vacation rental owners’ websites for over a year, in which time we’ve grown with them and learned from them. We’re an agile, young company with patent-pending technology approaching the market from an owner-focused angle, which is pretty unique in this industry.

Weaknesses:

• We view ourselves as a ‘blue-ocean’ startup because of our price and solution. Thus our challenge is creating new demand, not directly competing with other companies. Given that we are self-funded we have to be innovative in order to build awareness.

Opportunities:

• Vacation rentals have recently become big business with HomeAway and AirBnB spending millions ensuring that owners know how important the internet is. Some would view them as competition. I view them as a ‘gateway’ step to owners wanting to have their own website with more control, individuality, validity and potential profit.

Threats:

• We’re a bottom-up business and right now it’s trendy to be top-down. Our message takes a little longer to explain than a listing site’s: “join r site free and people can book u!”. We have to develop opportunities to demonstrate value to customers. Once they get it, they tend to get it.

Who advised you your idea isn’t going to be successful and why didn’t you listen to them?

An older, non-technical colleague suggested that vacation rental owners aren’t tech-savvy enough to build their own websites. I pointed him to our free trial, and bet him lunch that he could set up his own vacation rental website in less than 5 minutes.

He was shocked by how easy it was. I had the steak.

What is your success metric 12 months from now?

FutureStay has great retention and free-to-paying customer conversion rates. We think that means our clients like being in charge of their businesses. We’d be happy to secure some strategic partnerships and distributions that help us put thousands more people in charge.

Oh, that and more steak.

Here is a clip:

NB: TLabs Showcase is part of the wider TLabs project from Tnooz.

Who and what are you (including personnel and backgrounds)?

DepositGuard is a patent-pending, web-based service that securely collects, holds and administers the deposits and pre-paid rents for vacation and residential property transactions, benefitting both renters and homeowners (including landlords, property managers and rental agents).

DepositGuard, an Austin, Texas-based company, was founded by Alan Lane and Matt Neal. Lane, DepositGuard’s Director of Business Development, was a partner in a successful international vacation real estate sales, rental, and marketing company.

Neal, DepositGuard’s director of operations, has been in the vacation real estate industry since 1996 and has been a licensed broker in Colorado since 1998.

Prior to founding DepositGuard, Matt owned and operated a vacation real estate sales, rental and marketing company specializing in high-end luxury properties. Our experience led us to see a critical void in the market; and we saw a place to use our talents and experience to solve it.

What financial support did you have to launch the business?

Initially, DepositGuard was self-funded, but has since gone through one round of funding from angel investors for an undisclosed amount

What problem are you trying to solve?

To eliminate the worry associated with paying for vacation rentals – solving the problem for homeowners and businesses serving this market by standardizing the way money is handled for online home and vacation rental transactions.

DepositGuard delivers confidence for renters, homeowners and companies serving the vacation rental industry – and ultimately makes the vacation rental industry safer, more robust and more appealing.

DepositGuard protects the integrity of the contract entered into by the renter and the homeowner, providing a simple way to introduce new customers and add comfort for existing vacation rental customers.

Describe the business, core products and services?

A payment platform that is customizable for renters, homeowners, landlords, property managers, rental agents, travel agents, vacation rental sites and online travel agencies.

As a Software-as-a-Service (SaaS), DepositGuard operates a fully automated web-based service. The service can integrate into 3rd party rental listing sites and enables the renter and landlord to manage the flow of funds for online and “site unseen” rental transactions.

DepositGuard collects rental payments and security deposits, holds these monies, and disburses the funds to the landlord at specific, agreed-upon points in time.

Who are your key customers and users at launch?

We benefit every audience who touches the vacation rental transaction, including businesses that serve those in vacation rental businesses.

As well as all parties involved in vacation rental and short-term rental property transactions, including renters, homeowners, landlords, property managers, rental agents, travel agents, vacation rental sites and online travel agencies.

Did you have customers validate your idea before investors?

Yes. We conducted a consumer study and saw an immediate resounding agreement with our company’s premise. The need exists.

We are also renters and homeowners ourselves and our networks of friends and business colleagues are also in this area and our informal outreach proved to be very supportive.

What is the business AND revenue model, strategy for profitability?

DepositGuard has the unique competitive advantage of combining the proven revenue model of Airbnb with the proven distribution model of PayPal.

This allows the company to structure mutually beneficial relationships with the multitude of listing sites that are currently seeking ways to stay relevant in a rapidly changing industry.

DepositGuard collects a service fee from the renter based on the amount of the deposit at the time the deposit is made. If funds are deposited via MasterCard or Visa, the service fee is 2.99%. If deposited with eCheck, the service fee is 1.99%.

SWOT analysis – strengths, weaknesses, opportunities and threats?

Strengths:

• Understanding of this sector, technology and real estate expertise, platform experience from former business/real estate niche

Weaknesses:

• Fragmented market

Opportunities:

• Fragmented market, current solutions don’t solve comfort factor, need for standardization, exponential growth possibility when security and comfort are introduced intot he transaction

Threats:

• Do it yourselfers with no experience, making a black mark on reputable companies with escrow and operations experience

Who advised you your idea isn’t going to be successful and why didn’t you listen to them?

The vast majority of feedback has been very positive, however, like any new business, we have had a few naysayers. One that comes to mind was an investment banker who is also a friend of ours. It was in the early stages and we wanted his opinion as someone who advises technology companies every day of the week.

He thought the vacation rental market was too fragmented and did not see the need for a better way to transact.

We value his opinion but chose not to listen to him because we saw the need from our first-hand experience dealing with vacation properties. We are still friends.

What is your success metric 12 months from now?

We will measure our success by the number of satisfied clients and partners we have and ultimately the number of transactions.

NB: TLabs Showcase is part of the wider TLabs project from Tnooz.

Rumours of a $100 million+ funding round for the Silicon Valley-based Airbnb have circulated for a few weeks, but the company has so far refused to comment on the speculation.

Confirmation of Wimdu’s trousering of a massive $90 million came this morning from an official in its office in Beijing, China. The round comes from European investors Kinnevik from Sweden and Rocket Internet in Germany.

The official declined to outline what the company intends to do with such a large influx of capital, but presumably it will help fuel a major expansion programme for the fledgling startup.

In two months the company has already managed to secure a presence in ten offices around the world and it claims to have around 10,000 properties listed from 30 countries.

But it’s growth and dramatic plop into the marketplace appears to be irritating its rival on the US west coast (and in the Silicon Valley tech press, who consistently refer to Wimdu as a clone), with Airbnb supposedly sending emails to customers warning them about “imposter websites”.

Nevertheless, Airbnb has not exactly covered itself in glory in recent weeks after admitting that a number of rogue contract salespeople had used somewhat stealthy tactics to capture new properties owners via US classified service Craigslist.

In terms of the wider marketplace, with Wimdu capturing its funding round, Airbnb apparently on the brink of its own deal, European startup 9Flats recently securing $10 million and mega-brand HomeAway heading into an IPO, those holding the investment capital are clearly seeing vacation rental as the place to put their money.

This is not forgetting TripAdvisor’s focus in the sector, of course, with it snapping up the UK firm HolidayLettings in June 2010 as part of its own efforts to grow the vacation rental wing of the business.

On the one hand the addition of user reviews against products (in this case, 46,000 holiday homes in 116 countries around the world) is nothing new, a feature of countless other travel sites and pretty much to be expected given TripAdvisor bought Holiday Lettings in June last year.

The TripAdvisor reviewing system has been tailored for the rental site, Holiday Lettings says, but from the outside is essentially the same type of process where users can add a review to any of the properties featured on the site.

There is one significant difference which will no doubt cause a stir among critics of user reviews (or at least those that eye every move by TripAdvisor): owners will be asked to confirm that the guest actually stayed at the property before a review is made live on the site.

Once again, many other services elsewhere on the web have included similar verification processes to try and eradicate bogus reviews from competitors or PR companies – but this is the first time a TripAdvisor-run system has included such verification protocols on reviews.

Hoteliers, of course, may well be looking for the mothership to add similar verification functionality to the main TripAdvisor hotel site.

Unfortunately for them, a TripAdvisor official was quick to dash any such hopes in an email statement:

“We have no plans to change our current system for hotels.”

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.

The Vacation Rental Managers Association (VRMA) announced today at its annual conference in Texas that it is in discussion with Pegasus Solutions to build a “switch” for the vacation rental industry, adding to the already noisy buzz in the travel industry about the aggregation and distribution of vacation rental inventory.

VRMA is North American-based organization serving companies that manage, maintain and administer vacation homes owned by individuals, representing approximately 150,000 vacation homes, condos and villas in the US, Canada, Mexico and the Caribbean.

Pegasus is an established distribution services provider in the hotel industry worldwide, providing representation, reservations technology and distribution services, including an interface (the ‘switch’) that hotels and hotel companies use to distribute inventory, and information about inventory, to distribution channels.

In the hotel industry, the original switch was built by THISCO, a joint venture of several hotel companies in the late 1980s, who wanted to build a single interface they could write to, that could then be written to on the demand side by distribution channels.

The hotel companies wanted to avoid having to write direct connections to multiple distribution channels.

THISCO morphed into Pegasus in the mid-1990s and today, a number of distribution channels, including all GDS’ and large OTAs connect to the Pegasus switch to access hotel information and inventory, resulting in five billion transactions per month.

Together, VRMA and Pegasus plan to build the vacation rental switch so the industry can benefit from low-cost connectivity, inventory management and marketing, online merchandising and payment processing.

“There are several listing services in the vacation rental space,” says Steve Trover, CEO of All-Star Vacation Homes, a vacation rental management company based in Orlando, Florida, and a board member of VRMA.

“But no real way for management companies to effectively and affordably distribute rich information about their properties, control access to preferred distribution channels, and to actually transact bookings if they want without compromising their brand.”

Pegasus has built its hotel revenue model on the basis of per-transaction fee based on the value of the hotel booking.

Given the different economics of the vacation rental industry (lower per-night rates, fewer transactions because of longer lengths of stay), Mike Kistner, CEO of Pegasus, says:

“We recognize that the vacation rental industry is not built on the traditional hotel distribution model. Pegasus and VRMA will work together to find a revenue model that makes sense for all parties involved.”

Kistner says the vacation rental switch will utilize Pegasus’ primary technology platform RezView Next Generation, which currently powers the hotel switch and provides reservation services to 90,000 hotels in numerous countries around the world.

“What caught our eye,” says Kistner, “was the basic similarity of the hotel and vacation rental industries, and the fact that vacation rental properties are becoming a significant lodging alternative, and not just for leisure travelers.”

Kistner suggests the proposed vacation rental switch technology could help make information-rich vacation rental suppliers better able to distribute that information and inventory by protecting suppliers from very high look-to-book ratios expected in this segment, and by providing structured data descriptions of inventory for better searchability.

Homeway and Flipkey, two of the most-referenced companies in this space, use a listing model for their business (and pay either per listing or per lead), showing the property and whatever information an owner or management company provides, but ultimately pushing the consumer to the owner or management company via phone, email, fax or (occasionally) owner- or management company-built websites. The companies make money by charging the owner a fee to list.

Other companies, like LeisureLink, charge a transaction fee, and Instant Software, the biggest technology provider in this space (recently acquired by Homeaway) has the interesting model of charging the distributor US$5 per property, providing what seems like an obvious disincentive to a distribution channel to participate.

Pegasus is just one of many companies to recently invest in this industry. Just last week Homeaway announced that Google Ventures invested a substantial sum (purportedly US$25 million) in Homeaway.

VRMA and Pegasus say they are in contract discussion and expect to execute the contract and begin work shortly.

Kistner suggests the switch could be up as early as summer of 2011.

Brian Sharples, HomeAway co-founder and CEO, says his company wasn’t looking for cash, but over the course of weeks the two firms developed an interest in working together.

Sharples says Google Venture’s newly taken minority stake in HomeAway isn’t about Google getting into the vacation rental business or related to any big online booking push by HomeAway. Google Ventures doesn’t even have a seat on the HomeAway board, he says.

“We are not an instrument for Google getting into the travel space,” he says, adding that Google Ventures is tasked with making a return on investments.

However, with the deal, HomeAway gets access to a lot of Google talent.

“We can go around to different pockets of Google to help us solve problems,” Sharples says.

For example, Sharples says Google can help HomeAway with scaling vertical search and other tech issues.

And, since HomeAway is rapidly growing — as Google has done — HomeAway also can look to Google for help in solving organizational and Human Resources issues, for example, Sharples says.

In fact, for the past six or seven weeks, Sharples says, HomeAway has picked up on a Google tradition of Friday video broadcasts to company offices around the world.

Thus, HomeAway has initiated a weekly Friday morning video broadcast, which it calls Table Talks, featuring Sharples and other senior execs at headquarters in Austin, Texas, sitting around an Art Deco-style 1950s era kitchen table, “chatting about whatever is going on in the business,” Sharples says.

The table symbolizes entrepreneurship because some of the million dollar companies that HomeAway acquired along the way were being run from execs’ kitchen tables.

Sharples declined to specifiy the amount of the Google Ventures investment, saying it was a significant amount, but probably not a lot for Google.

“We definitely don’t need cash. We make plenty of money. Google wanted to get involved with the company and invest. We think they are smart people and are happy they wanted to acquire a position in the company.”

With today’s publicity about Google Ventures taking a minority stake in HomeAway, there probably was a lot to talk about at the kitchen table in Austin this morning.

The original story follows:

Google Ventures, the investment division created by the search giant in early-2009, has spent a sizeable chunk of its annual fund on HomeAway.

Although not on the same scale and type of the proposed ITA Software acquisition, Google clearly has an increasingly focused eye on the travel industry.

The vacation rental giant’s CEO spoke about the deal to the New York Times this afternoon. Independent confirmation still to be obtained.

Google Ventures has a stated aim to invest around $100 million every year in companies “ranging from seed investments as small as a hundred thousand dollars to late-stage investments of tens of millions of dollars”.

The division and its investments are not seen as operational ones within the wider Google empire, so any worries about the Big G moving in directly on the vacation rental industry are premature at this stage.

Other companies under the guidance of Google Ventures include social TV platform Miso, gaming firm SCVNGR and bio-tech company Adimab.

Sharples does not state the value on the investment, although some are estimating around $25 million. No money is believed to have changed hands, with Google Ventures apparently buying out existing shareholders.

HomeAway is looking to Google for technical guidance on improving the website and making the core business of renting properties more efficient, Sharples says.

—–

NB: Dennis Schaal contributed to this story.

Who and what are you (including personnel and backgrounds)?

MyFriendsHotel is a peer-to-peer online marketplace for renting accommodation. Independent property owners can list anything from a spare bed to a luxury villa for anyone to rent.  Hosts can make some extra money from their spare space, while Guests save money on hotel costs and get a trusted local travel experience.

We connect people and places by considering three personalities: the host, the guest and the property; our intuitive search features make it simple to find properties to suit you.

I was born in Hong Kong and have lived in 8 different countries. Personal experience   has shown me that local hospitality is a great way to get under the skin of a city or country. The website connects like-minded people, using the internet to open up the realms of travel so that we can all find unique and interesting places to stay around the world.

Prior to founding MyFriendsHotel, I worked as a product development manager for Fremantle Media. My love for travel and my ten years experience in new media prompted me to develop this site and plug an obvious gap in the market.

What financial support did you have to launch your business?

The website is boot-strapped. This was a once in a lifetime, go-for-broke, opportunity.  My passion is travel and my extensive experience in this area, combined with my love of innovation, prompted me to take the plunge.

What problem are you trying to solve?

We connect people and places by considering three personalities: the host, the guest and the property.

By enabling more intuitive searches more relevant properties are found, and a bit like dating, by matching the right property to the right person we aim to achieve more repeat bookings. This means, happier customers, memorable holidays and real friendships between likeminded people.

Matching people and places through location and interest offers a much more meaningful and long-term solution.  In that respect we are unique.

Recent statistics by PhoCusWright show that 78% of holiday renters are more likely to book accommodation which has a review and 73% of referrals for owner rented accommodation come from friends, family referrals and previous guests.

MyFriendsHotel is really focused on catering to and capturing this market

Describe the business, core products and services?

We provide a secure platform for hosts and guests to list and rent accommodation (anything from a sofa-bed to a villa).

Hosts and guests create a profile on the site and choose their interest tags. These tags link Guests to Hosts.  In total, there are over 200 tags to link hosts, guests and accommodation.

They include:

• Interests
• Activities
• Holiday type
• Setting
• Property type
• Facilities

Host and guests are able to communicate openly on the site (by writing on a profile wall or using our private messaging service), and our booking system is secure.

When a guest pays they receive a Unique Verification Code, which they give to the host at check in.

This code then allows the Host to activate payment. The host is paid 24-48 hours after the code has been activated.  This protects everyone from fraudulent activity.

Payment is managed through PayPal credit cards are accepted and bank details are traceable if necessary.

Feedback is 100% genuine as only hosts and guests who have booked through the site are able to leave feedback.

The website also allows Hosts to only show their profile to friends should they require this privacy.  This allows people to offer ‘mates rates’ to friends or by using our HTML badge* members can target their own niche audiences.

We also have a charity option for hosts who are using our service without requiring any financial gain. In this instance, MyFriendsHotel will also donate its proceeds to charity.

Who are your key customers and users at launch?

• Hosts – are 25-70+ but outgoing, adventurous and interesting people who like the idea of meeting or accommodating travelers.
• Guests – they vary a lot and are slightly younger than hosts.  We appeal to anyone from a musician on tour, to businessmen wanting a change of scenery.

The common denominator is members tend to be outgoing, positive thinkers who enjoy meeting people.

Did you have customers validate your idea before investors?

Yes. I conducted thorough market research prior to initiating this project and also had statistics from PhoCusWright indicating a significant market opportunity.

I am also a traveller and a homeowner so I recognised the gap in the market from my own experience.

A few websites offering a slightly different proposition have sprung up since we first came up with the concept.  We now need to work smarter and faster to build our customer base and position our self in pole position.

To do this we are improving searches and developing unique tools to help members find trusted places to stay.

What is the business model AND revenue model, strategy for profitability?

The site is free to join. It is also free for hosts to list accommodation. Hosts only pay when they make money.

Hosts are charged a 10% fee on the cost of a booking. Guests are charged a £3/Euro 4/$5 booking fee (dependent on the booking currency).

We felt it was more open to charge the host the commission rather than adding, in some cases up to 15% (+3% to the host) to the cost of a property at the point of purchase. Our business model makes us cheaper for guests.

SWOT analysis list under each title strengths, weaknesses, opportunities & threats?

Strengths:

• By connecting Hosts, Guests and Properties through Interests we offer much better search criteria.
• The current economic climate also works in our favour as more people are having to find ways to save money or to cover the cost of their mortgage.
• We’re innovative and driven by the customer not the shareholder.
• We are also a green travel solution by better utilising existing accommodation and utility resources.
• 20% of people travelling have no destination in mind when initiating their holiday search, so we’re a great place to start and search by interests!
• We have a good, strong brand to build on which in a competitive market place is really important.  What’s more, having “Hotel” as part of the name is a real SEO gem!

Weaknesses:

• Being self-financed is difficult with a long tail idea such as this.
• Being such a small company there are not enough hours in the day!
• Competition is growing and soon the public may not be able to differentiate between us all.

Opportunities:

• There is a growing awareness of ‘homestays’ as being legitimate and trusted accommodation alternative.
• As our network grows, the benefits to our community will also grow, through our new development tools.  We’re not worried about scalability, as we’ve built the site to accommodate the personalities of the host, the guest and the property right from the start.  As the number of ourlistings increase, we’ll be able to present properties and hosts that are more tailored to a users’ personal requirements. As such, few search results will ever be the same. This makes us different to the competition in a fundamentally important and useful way.
• We offer a service that is useful and interesting to a global audience.
• We’re now a working website and are able to improve and develop the services we provide.

Threats:

• Laws may be introduced in major cities to prevent short-term rentals – such as the new legislation in New York.
• Competition is growing, especially now that big players are showing and interest in this previously niche sector.
• Safety is always an issue for any traveller and we will do everything possible to minimise the risks in our community.

Who advised you your idea wasn’t going to work and why didn’t you listen to them?

Nobody blatantly said the idea wouldn’t work.  A Fortune Teller in Hong Kong said it would be a long road and hard work.  He was right and maybe I should have listened!

What is your success metric 12 months from now?

To be profitable with an organically growing membership base.  This would indicate that we’re offering a useful service and that the community is happy!

Here is a clip explaining the MyFriendsHotel concept:

httpv://www.youtube.com/watch?v=_Ma7TY3p50M

NB: TLabs Showcase is part of the wider TLabs project from Tnooz.

Who and what are you (including personnel and backgrounds)?

My name is Erick Arndt. I was a management and technology consultant for Accenture and Ernst & Young Management Consulting for many years, helping Fortune 500 implement technology and save money and time.

I am also a timeshare owner for 14 years. I like traveling with my timeshare but got fed up with the never ending fees and poor service from my timeshare exchange service. I also found out the exchange service was ripping off timeshare owners.

Tired of complaining about it, I decided to use my savings to launch a free website for the millions of timeshare owners around the world to trade timeshares with each other for no fees at all.

Not only do owners LOVE the free trading but the ability to read resort reviews written by other owners is allowing owners to get “real” reviews of resorts not just rely on the paid-for reviews that they get today.

What financial support did you have to launch the business?

My savings.

What problem are you trying to solve?

• Today, there are over 6.5 million timeshare owners. Each has the right to trade their “time” or “week” with another owner so that each can travel to different resorts for vacation.
• For that privilege, my competition charges owners an annual fee of $100 to be part of an exchange club whether they want to trade this year or not. When they do want to trade, they have to pay another $150-$200 for that. There are also other fees associated with this. The service is awful because the two exchange companies know they control the industry. The more I travelled the more timeshare owners I met and realized it wasn’t just me that was fed up. Timeshare owners have no say and no power in this industry. It’s time for disruption.
• The industry is being held back by this “cartel”. I know timeshare owners avoid trading and traveling to new places because the fees; some try to sell their timeshare for anything so as to avoid the constant barrage of fees each year (by dumping their timeshare on the market it is driving down prices); less people are buying because word about the fees being charged has spread to prospective owners.

Describe the business, core products and services?

• Owners join for free in 10 seconds (even faster with Facebook Connect). They list their timeshare in 1 minute. As soon as they list their timeshare, they can begin to receive trade offers from other owners. Each trade offer they can Accept or Reject with one-click. They can also make offers to other owners with 1 click. Trades are free. Both parties to the trade get auto-confirmation of successful trade along with confirmation number.
• Members earn “Juice” the more they contribute to the community (complete their profile, rate/review resorts, make offers, complete exchanges etc). The members with the highest Juice become famous!

Who are your key customers and users at launch?

I launched the service in May 2010 to a few timeshare owners I knew.

We had all traded timeshares by word of mouth for years. I had about 200 owners during the Beta test. The Beta test confirmed that:

• 1) owners around the world wanted to trade through the web for free
• 2) the website we built was so user-friendly that any owner from ages 18 to 80 could sign-up and trade online with TimeshareJuice.

Since then, word is spreading and now we have users all over the world and growing very quickly.

We are in discussions with several resorts about advertising on the site.

Did you have customers validate your idea before investors?

I don’t have investors. But we did an alpha and beta test with timeshare owners to prove the process.

The feedback initially was that the concept was great but the site wasn’t intuitive enough. Too many people couldn’t figure it out (even though the instructions were there, people just didn’t read them – we learned that lesson).

Now the site is so intuitive that we haven’t gotten one of those emails in quite some time.

We spent a lot of time communicating (ie “listening) to our members about what they could and couldn’t do on the site in order to create a great user experience.

What is the business AND revenue model, strategy for profitability?

• The business model is to enable the trading of timeshares for free and build a global community of timeshare owners. The revenue model is to make money on the advertising of vacation products and services to people who are booking and planning their vacation. Resorts want to display their properties to existing owners of timeshare owners of other resorts. Our community is a market that is already interested in this product and they are also qualified to buy.
• We are also talking with online travel booking services about providing “targeted” travel booking services to our members. We earn commissions on each booking.

SWOT analysis – strengths, weaknesses, opportunities and threats?

Strengths:

• Great user experience (fast, easy, and fun) and free exchange services. We also have a very low cash burn rate compared to our competition.

Weaknesses:

• Unable to mass market to owners around the world.
• Competitors are billion dollar companies with massive stockpiles of cash, brand recognition, and decades of business relationships

Opportunities:

• Competition is abusing timeshare owners with poor business practices, high and higher fees, poor service. Owners are actively seeking a viable alternative to current providers. Resorts are well aware of this abuse but they are not interested to market our services openly to their owners for fear of financial repercussions from our competition.

Threats:

• The internet is the great enabler on which anything can happen. We also realize that sometimes the first mover advantage isn’t always an advantage.

Who advised you your idea isn’t going to be successful and why didn’t you listen to them?

Honestly, I am my worst critic. I’ve never had anyone say that to me except me.

Sometimes it just pops into my head that this is a crazy idea to take on not one but two billion-dollar companies with such long established business histories.

Then I talk myself down from the cliff and get back to work.

What is your success metric 12 months from now?

250,000 members, $50,000 monthly cash flow.

Our vision: We believe vacations are the “Juice of life”. You create lasting memories that inspire, cheer up, and share bliss when you’re on a vacation. It fuels the soul and the creative energies.

By connecting owners we are enabling more vacations to occur. We are trying to get the best (the “Juice”) out of timeshares. We want to make timeshares more fun!

NB: TLabs Showcase is part of the wider TLabs project from Tnooz.

Who and what are you (including personnel and backgrounds)?

RRBO was founded in 2009 by three former executives from CompuServe and AOL who also had experience with timeshare ownership.

We saw a market that was inefficient, and created a website solution.

Using RRBO, timeshare owners can easily rent their units when they are not using them, and people going on vacation can rent villas at exclusive resort destinations at prices 30-50% less than what hotels charge.

The company’s founders are:

• Mike Blackwell – CEO, was the former CEO of ShareThis, one of the most popular tools used on the internet and previously led AOL’s search technology group.
• Mike Doel – CTO, has 15+ years of software development and management experience leading the development team at CompuServe.
• Bob Kington – COO, has extensive senior management experience with over 25 years in technology companies including OCLC, Goal Systems, and CompuServe/AOL where he was the Executive Producer of the online service.

What financial support did you have to launch the business?

The business was bootstrapped and the founders spent the first year working for minimum wage on a sweat equity model to build and launch RRBO as quickly and inexpensively as possible.

The company has raised $810,000 in equity financing from angel investors including the Ohio Tech Angel Fund.

What problem are you trying to solve?

There are more than five million timeshare property owners in North America at 1600+ resorts that are among the finest vacation destinations available.

About 60% of owners trade or try to rent their units each year but there hasn’t been an easy way to rent, until now.

Timeshare owners have told us they’d like to be able to rent their properties but don’t want to arrange all the details with the renter. At the same time, many people who rent vacation properties are looking for two and three bedroom villas rather than a hotel.

They want to go to resort properties with great amenities, but they don’t want to pay “retail” in prime season. Who does? Resort Rentals By Owner was created to meet these needs.

Describe the business, core products and services?

RRBO.com is the core product, and offering dramatic price savings to people going on vacation is our key value proposition.

Vacation resort properties (and hotels) have sophisticated and powerful marketing programs to offer and book their available rooms. Most use trading partners and wholesalers such as Orbitz, Travelocity, Priceline and Hotwire.com who plug into the hotel reservation systems and market available rooms.

Importantly, there are price thresholds that protect the wholesalers and in effect set the minimum pricing in the market. RRBO is different – and markets available timeshare units at prices established by the owners of these units with pricing that is 30-50% below these minimum thresholds on a consistent basis.

Several resort property companies offered us the opportunity to list their available units on our site but it was clear that minimum price thresholds were required so that large wholesalers such as Orbitz could guarantee the lowest market prices in their marketing programs.

RRBO has declined these offers, as its business model and value proposition is contingent upon offering rentals with dramatic price discounts versus the large travel sites. RRBO – by offering rentals directly from individual owners who are motivated to rent and want to cover their annual maintenance fees, has a structural price advantage versus the resort properties and travel web sites.

Who are your key customers and users at launch?

When RRBO.com launched in June, 2010 there was detailed information on over 700 separate resorts and over 4,000 individual rental listings which is growing daily. Initially the focus is on the US and Caribbean, with some properties in Canada and Mexico.

Did your customers validate your idea before investors?

Yes, we spoke with dozens of timeshare owners to validate that they’d use an online rental tool if it were available as long as they didn’t have to negotiate and deal with individual renters. They wanted a solution like StubHub, and not one like Craigslist.

What is the business AND revenue model, strategy for profitability?

The company has a transaction-based business model. For each rental on the site, the owner will be charged a 15% fee of the rental price for marketing the rentals and managing the transaction if and when a unit is rented. (There is no charge to list a unit for rent, which is a competitive advantage versus listing sites such as VRBO and Redweek.com.)

Additionally, renters will be charged a 5% service fee on each transaction, which is consistent with comparable online services such as StubHub.

In time, add-on services such as travel insurance, car rentals, etc. will be added to the offering generating additional revenue for the company.

With an average rental price of $1,500, the company will initially make $300 (20%) per transaction and a gross margin in excess of 50%. The RRBO price advantage will be the key marketing message. The company projects that over five years it can capture 6% of the exchange and rental market (5,000 rentals per month) generating over $27 Million in revenue per year.

SWOT analysis – strengths, weaknesses, opportunities and threats?

Strengths:

• Great product, seasoned team, solid transaction-based business model

Weaknesses:

• Low market awareness, noisy marketplace, unmet market need.

Opportunities:

• Can leverage platform in additional markets (e.g. timeshare sales, vacation homes).

Threats:

• Ability to raise enough capital to grow business.

Who advised you your idea isn’t going to be successful and why didn’t you listen to them?

We spoke with dozen of potential investors when we were raising capital and many declined to invest for various reasons.

A common theme was that the economy was poor and it was a bad time to start a business. While it’s been difficult to raise capital in this environment we believe that our core value proposition is perfectly suited for this economy, so we’ve proceeded.

What is your success metric 12 months from now?

Booked vacation rentals. We expect to be booking 200 rentals per month 12 months from now.

NB: TLabs Showcase is part of the wider TLabs project from Tnooz.

Sometimes I’ve rented from management companies and sometimes I’ve rented directly, sometimes a few weeks out and sometimes months and months out.

Having spent my entire career in travel, and the last ten years in travel distribution, I’m a pretty savvy (I think) traveler.

I understand travel products, how they’re presented, delivered, contracted, and operated.

I know how to effectively search for travel products, and I’m probably more willing to take risks in booking travel than the average person.

So I’m getting ready to go on vacation to France and I booked, as you would expect, vacation rentals for my accommodations

And it was an incredibly painful experience – navigating un-navigable web sites, squinting at out-of-focus photographs, looking in vain for a description (in any language) of a property, wondering if the availability calendars were accurate, hoping the owner or manager of the property would deign to return my inquiry.

What exactly are the complaints?

Site navigation

Some sites, to their credit, had filters on their left navbars (not unlike Kayak as an example), but these filters are worthless if the properties aren’t tagged correctly in the database.

• If I ask for a detached villa or chalet (and the site allows me to ask for that), I don’t want to see an apartment.
• If I ask for Chamonix, don’t show me Samoëns.  The site has just lost credibility and I’m moving on.

Cross-site listings

I’m somewhat sympathetic to small property owners who list their properties on multiple sites, but what am I supposed to think when the same property is represented differently on different sites, when photos or availability calendars don’t match?

In almost every case, if a property owner had taken the time (and spent the money) to build their own site, the information on that site was generally much more extensive and useful.

But as a buyer, I don’t want to visit 30 different sites to see all the properties that might meet my needs. I want a site that aggregates data; it’s quicker for me to find what I want. In theory, anyway.

Property information

Every hotel company worth its salt knows it has to present photos of the hotel room (at least two), exterior, important features (pool, beachfront, rooftop deck, pistes) and possibly the surrounding area if it’s a selling point (Times Square or Mont Blanc).

I wish the vacation rental industry had the same rule of thumb.  Here’s what I want to see:

• Front exterior view
• Terrace/balcony view
• Living room
• Bedrooms
• Kitchen
• Dining room
• Baths
• Neighborhood

The more photos presented, the more confident I am in the validity of the listing. I also want to see a text description of the property, and it doesn’t matter if the text is in a language I don’t speak.

There are enough free online translators now that I can get a decent idea of what the property owner is trying to say.

As with photographs, the more text I can read, the more confident I am that the listing is valid and just might meet my needs.  It also shows me the owner or manager cares about the property and about communicating the value of that property to me, the buyer.

Availability – the worst offense

Why offer a calendar function (as every vacation rental site now does) then allow the property owner to ignore it?

At least some sites are now showing a “last updated” date on the calendar so I can see that the calendar was last updated three months ago and come to my own conclusions.

If the owner refuses to use a calendar, or hasn’t updated it recently (say 14 days?), hide the calendar and indicate up front that the owner must be contacted for availability. That allows me to decide if I have the time to follow up with that owner.

Acknowledgement of inquiry

Some of the bigger sites send an automatic acknowledgement of receipt of inquiry.  That’s nice, but it doesn’t help me understand if the property is available.

A majority of my inquiries went totally unacknowledged – that’s right, a majority. That is no way to do business.

Real-time booking

It’s still very rare to come across real-time on-line booking for vacation rentals, but it’s happening more and more often on management company websites (I never saw it offered by individual owners).

And it’s a blessing.  If I’m willing to take the risk of booking online (like I do for hotels or resorts) after viewing your beautiful site with lots of photos and information, let me. Please.

This industry needs some standards, and I’m not talking just about distribution.

Presentation, description, terminology, terms-and-conditions, availability, response – there was no similarity of behavior amongst the sites I visited.  I understand there will be regional differences, but ultimately it’s still just a unit of inventory to be displayed and booked like air, rental cars, hotels or cruises.

It’s clear this is one of the reasons the vacation rental industry suffers from an occupancy rate in the 30s instead of in the 70s like the hotel industry.

Make the product easier to buy and more people will buy it. Make it hard to buy and watch your customers go to a resort.

The primary challenge is obvious – hundreds of thousands of suppliers worldwide. Aggregating hundreds of thousands of units of inventory is hard but HomeAway is working on it, buying vacation rental sites around the world at a good clip.

It’s one thing to have the inventory in one place, but quite another to have it presented in a standard, useful and bookable way.

I reckon, from start to finish, I spent 20 hours total to find three properties for a two-week trip. And I’m an experienced traveler in the travel industry.

How long would it take the average person?  Too long, I’d guess.

So what did I book finally, and from whom?

• A house directly from the French owner who has a really great website (although I found the property cross-listed on an aggregator site) with tons of photos and information and real-time availability, paying via PayPal.
• An apartment from a France-based management company who had their own website, again with lots of property information, real-time availability AND online booking with a credit card.
• A house directly from the English owner who listed the property on an aggregator website but loaded their page up with huge amount of photos and text describing the house, its contents and its environment, and real-time availability, paying via wire transfer (which cost me a USD35 fee from my bank).
• All three were immediately responsive to my requests either in the same day (if I sent my request in the morning US time) or overnight if I sent my request in the evening US time.

I expect to have a wonderful time on my trip, but I don’t expect to see much increase in the occupancy numbers of the vacation rental industry if the industry doesn’t make their product easier to understand and easier to book.

À bientôt!

The two Toronto, Canada-based travel online travel startups will operate under the iStopover brand name with PlanetEye CEO Jonah Sigel becoming president and CEO of the new company.

PlanetEye started out life as a consumer-facing, travel guide and content site, respected for the proprietary mapping technology from Microsoft it used within the site.

The company has morphed over the past 18 months to focus on providing web technology and travel content to third parties.

iStopOver is an accommodation rental website which also creates individual rental platforms for major sporting events, such as the recent FIFA World Cup 2010 in South Africa.

More details are expected in the coming weeks about the new company’s wider strategy but the funding will be directed at expanding the technology in the company and boosting the sales and development programme.

Who and what are you (including personnel and backgrounds)?

Onefinestay.com is London’s first “unhotel”. Guests can live like a local in a London home for a few days while the owner is out of town, while owners earn a hassle-free income. onefinestay offers a new category of accommodation that is spacious, characterful and better value than a hotel.

The company was founded by three serial entrepreneurs with property management, logistics, investment and technology experience.

• Greg Marsh (CEO) was previously on the investment team with venture capital firm Index Ventures. Prior to that he had management roles, most recently as product manager, at GF-X. He has an MA from Cambridge, and an MBA with high distinction from Harvard Business School, where he was a Fulbright Scholar and graduated top of his class. He also works with Amnesty International where he’s an elected member of the charity’s Finance and Audit Committee.
• Demetrios Zoppos (COO) has previously held leadership roles at several businesses, including a property management company. He was the operations director and managing director of GF-X, the leading trading exchange for airfreight capacity, which raised £50 million and was acquired by Descartes. He was a former consultant at McKinsey & Co. He has an MA first 1st class honours in Economics from Cambridge and an MPA from Harvard’s Kennedy School where he was a Fulbright Scholar.
• Tim Davey (head of technology) was co-founder and CTO of SnapTalent, a web recruitment ad marketplace based in San Francisco, which raised funds from Y Combinator and other leading investors. He has seven years of graphic design, web application and open source software development experience. Tim has a BA in theoretical physics from Imperial College.

What financial support did you have to launch the business?

The company raised some money from friends & family prior to launch.

What problem are you trying to solve?

We are creating more accommodation in an overcrowded city, but using the resources we already have: people’s homes.

Instead of building more hotels on space we don’t have, we are meeting the demand for city accommodation while offering a more characterful experience for those who are bored of staying in hotels.

For people who are often away from their homes, we deliver extra income on their greatest asset. Because we handle everything from marketing to insurance, cleaning to maintenance, they enjoy the benefits of that income without the inconvenience of short letting or trying to find their own house guests while they’re out of town.

A million UK households have bought second homes over the last decade. This means tens of thousands of central properties stand empty for weeks on end. For owners of those homes, onefinestay offers an ingenious and safe ‘turn-key’ solution, providing cash without hassle.

Describe the business, core products and services?

For guests, our services provide an alternative to a traditional hotel. Nobody wants to be a tourist, so our homes come with recommendations from the people who live in them.

We’re on call 24/7 for anything a guest needs, and provide all guests with our 5* hotel linen, fluffy white towels and toiletries from The White Company. Room service and concierge services are set to roll out over the coming months.

We want guests to live like a local while they’re in London. We lend them an iPhone which we to make local calls and get info about the area and the home.

We put small barcode labels on things like paintings or set-top boxes. You press the scan button in our app, point the phone at the barcode, and a short video plays automatically of the host explaining the history of the painting, for instance, or how to use the TV.

Who are your key customers and users at launch?

Our guests are sophisticated travellers who can afford a boutique hotel, but seek a more unique experience. We appeal particularly to regular business travellers to London, professional couples seeking a unique way to experience the city, or for families with children,

Our hosts are occupants of distinctive homes who spend time away from town, but lack the time to handle the complexities of managing their property while they’re away.

What they most value is having the home returned to them in just the state it was left – or maybe even a little bit cleaner!

Did you have customers validate your idea before investors?

Definitely! One of the great things about our business is that unlike a hotel, we don’t have to build the whole thing all at once and cross our fingers that people will like it.

Rather, right from the start we have been actively evolving our service based on feedback from guests and hosts.

What is the business AND revenue model, strategy for profitability?

We’re a bit like a hotel in that guests pay us a deposit to guarantee their booking, and we then take the balance of payment by credit cards when they arrive.

With hosts, we agree a fair rate, which is usually similar to the long let rental value of their home, and take care of all of the hassle.

We’ll reach profitability when we have enough hosts and enough guests!

SWOT analysis – strengths, weaknesses, opportunities and threats?

Strengths:

• We hearing from guests and hosts that they regard our service as something new which differs from what others are offering. Guests tell us they greatly value the opportunity to live like a local, in the comfort of a home, and with the services of a hotel. Hosts tell us they value the convenience of the service.

Weaknesses:

• We’re a start-up with limited resources and far too much to do! Having too much demand is a high class problem—but it’s still a problem. So hiring great people to scale up our service, finding great new homes in London, and ensuring guests have a fabulous stay is a juggling act!

Opportunities:

• We want to see an unhotel in every major world city. We think it can be a whole new category of accommodation.

Threats:

• We keep our eye on several other companies who we think might start to do what we’re doing. But our business is a bit like an iceberg and we think that many potential competitors will be put off when they realise what needs to happen below the surface to make it all work!

Who advised you your idea isn’t going to be successful and why didn’t you listen to them?

From the very start, people have loved the concept, but some have been scared of the logistics complexities. When Greg first thought up the idea, one of his close friends asked him, “are you really sure you want to run a hotel?”

What gave him the confidence to take the plunge was the commitment of his two co-founders, Demetrios and Tim, who bring engineering prowess, technical ability, property management experience, and logistics expertise.

What is your success metric 12 months from now?

12 months from now we want enough homes and enough guests to be comfortable profitable in London. We want to have an even broader range of guest services launched and ready. And perhaps even another little unhotel on the way…

NB: TLabs Showcase is part of the wider TLabs project from Tnooz.

Due to the recent economic downfall guests are searching for alternative accommodation products for their leisure travel.

Vacation rentals are capitalizing on this trend and finding ways to reinvent their offer and look for new online distribution channels.

Firstly, there are now important distribution sites like Homeaway to sell their units.

Secondly, vacation rental owners and managers finally understood that having their own website and a reliable ecommerce system with social marketing tools can help them grow their business.

These two aspects, coupled with consumers’ willingness to accept lower levels of service, are now turning vacation rentals into real alternatives to hotels for leisure travelers. But what aspects of the environment are influencing the shift to vacation rentals?

1. Guest search is intensifying

Industry studies show that the overwhelming majority of travelers (up to 80%) select their accommodation through the Internet and over 50% end up booking online.

In addition, online search is intensifying and consumers are searching tens of sites for experiences outside the “normal” hotel before booking.

New accommodation products are emerging with an experience and budget orientation: vacation rentals, design hostels and couch surfing are now all valid accommodation alternatives for leisure travelers.

2. Specialized distribution networks are being established

Searching for and booking vacation rentals online has been difficult to date. Mostly, vacation rentals have been rented out via intermediaries and word-of-mouth.

But, since HomeAway acquired VRBO in 2006, the vacation rental online distribution business has grown very rapidly as an alternative to traditional mediation agent.

HomeAway.com has been the unifying force that has taken a highly fragmented and localized business and made it easy for consumers to search for vacation rentals on a global scale.

This rapid adoption of distribution sites is similar to the adoption of online travel agents like Expedia as a preferred tool to search for and book hotels in the late 1990’s and early 2000’s and is the foundation of establishing e-commerce and distribution networks for vacation rentals.

3. Professional website design and high quality pictures are affordable

A successful online business starts with a website that transmits quality, professionalism and credibility through professional design and good pictures.

With today’s technology it is extremely easy for vacation rentals to have a professional website that:

• Communicates their property’s unique look and experience to web visitors.
• Is quick and easy to setup, avoiding long and complex web design “projects”.
• Can be kept updated without external involvement.
• Provides a pay-as-you-go model, so that upfront investment is minimized.

When setting up a website, images are paramount, as they are the second factor right behind pricing in terms of influencing the choice of property to stay in.

With the proliferation of digital cameras, it is now extremely easy even for amateur photographers to create good pictures that provide renters with the experience at the property.

4.Ecommerce solutions are readily available

82% of hotel guests prefer to book directly at the website of the property if they can get a good price and a trustworthy experience.

While vacation rentals are not experiencing this level of direct business yet, industry studies show that direct rental business is increasing at good pace, and it is expected that the same behavior as for hotels will apply.

If you tie these results with the rate of growth of online bookings in 2009/10, then now is the perfect time for vacation rentals to capitalize on the online opportunity.

A powerful ecommerce offer enables properties to maintain good levels of occupancy rates and decrease distribution costs.

5. Social engagement is the new word-of-mouth

The use of social media like Facebook and Twitter has changed the way people communicate, forever. Word-of-mouth is now amplified by millions.

This creates the perfect opportunity for vacation rentals to overcome the SNAD (significantly not as described) curse, as positive reviews of a property distributed by a network of friends can generate immediate referral business.

Satisfied customers will always provide and share good reviews and comments about their stay. Hence, no matter the size of the property it is very important to have direct communication with guests in order to promote and sell their units and understand their needs.

This will reflect on an increase in people that follow the property and create a snowball effect on the property’s brand. New technologies simplify this social interaction and provide the necessary information to create strategic viral marketing campaigns to increase market share.

Conclusion

Guest search is intensifying and alternative accommodation products like vacation rentals are becoming mainstream options for leisure travelers due to their willingness to accept lower levels of service.

Vacation rentals are capitalizing on this trend and behaving like mini-hotels by looking for new online distribution channels, establishing their own websites, e-commerce systems and leveraging social media to overcome the SNAD (significantly not as described) curse, and create referral business.

By adopting this strategy, vacation rentals are becoming mini-hotels that can compete for business and improve occupancy rates and profitability and weather difficult economic times.

NB: This is a guest post by Pedro Colaco, president and CEO of GuestCentric Systems. More information and case studies.

Late last week, HomeAway and TripAdvisor saw New York governor David Paterson (with the support of NYC mayor Michael Bloomberg) sign into law a measure to ban vacation rentals of less than 30 days in some city buildings – an issue both companies are opposed to.

HomeAway co-founder and chief strategy and development officer, Carl Shepherd, urged others looking to protect important revenue streams to write to Paterson.

But the apparent failure of the opposition campaign – the only leeway appearing to be a stay of execution until mid-2011 – hasn’t dampened strategy too much at HomeAway.

The company has switched its attention 3,000 miles across the Atlantic Ocean to London, which happens to have a burgeoning property rental scene and the small matter of the Olympics Games in 2012.

In an announcement today, HomeAway claims the average owner stands to make around £4,500 if they rent a property for the entire 16-day extravaganza, assuming prices double to coincide with the event.

The company currently has 500 properties in the UK capital and is predicting an increase in the number of listings by around 100%, based on experience in South Africa for the World Cup tournament this year when the site experienced a significant increase in residents renting out properties.

The Olympics has the “potential to earn millions in rental income” for Londoners, says UK general manager Tim Boughton.

Unless local government officials introduce similar legislation, of course…

In that regard, Carl Shepherd, HomeAway’s chief strategy and development officer, says he thinks the New York action is less a bellweather than a testament to the power of the New York City hotel lobby, which pushed the bill.

Shepherd, a HomeAway co-founder, said the company has been in touch with New York City vacation-rental owners and “friendly competitors” since Paterson signed the bill and will formulate a plan within the next couple of days on how most effectively to get the law overturned.

TripAdvisor snapped up UK-based HolidayLettings yesterday in an undisclosed deal.

HomeAway wasn’t asked to give a reaction to the acquisition (just some detail on where HolidayLettings stands alongside HomeAway-owned brand HolidayRentals), but it still sent a lengthy response, perhaps hinting that the Austin, Texas-based company is finally looking over its shoulder.

European president Petra Friedmann says:

“This move comes as no real surprise to anyone following the travel industry – and specifically the holiday rentals space, which we have been dominating over the past five years through rapid growth and acquisitions. Holiday rentals is one of the very few sectors that has experienced strong year on year growth – even during one of the worst recessions on record.”

HomeAway goes on to say how the company has seen annual revenue growth of 95% since it was formed in 2005 and can now boast half a million properties listed worldwide.

“To put that into context, that’s more rooms than the world’s leading hotel chain,” Friedmann says.

She ends:

“If the growth of HomeAway, the world’s leading holiday rental company is to be used as a barometer for the industry, our enquiry, traffic and listing figures suggest that investment in the holiday rentals space is a sound business strategy.”

It would be reasonable to expect any rhetoric from HomeAway in the coming months to consistently use the term “world’s leading holiday rental company”.

TripAdvisor has been in the rental game for a while (FlipKey acquisition in 2008 hinted at things to come), but it is the move into Europe – HomeAway’s extremely fertile region for growth in recent years – that indicates how seriously it is taking the sector.

Neverthless the signs were there earlier this year when TripAdvisor parent Expedia Inc waded in with what looked at the time to be a random comment from its CEO Dara Khosrowshahi.

He predicted HomeAway would go public in 2010 – a suggestion quickly denied by HomeAway.

As one figure close to the situation suggested yesterday: CEOs of Wall Street-listed companies do not make predictions about other companies unless they have a pretty good idea it is going to happen, or they are mischief-making and reminding people of the power they can wield.

Perhaps in this case it was the latter?

The site is now available in French, Italian and Spanish and has already slipped into the HomeAway web interface used across the portfolio.

HomeAway purchased BedandBreakfast for an undisclosed fee just three months ago.

The site has have over 11,000 properties listed around the world and was the latest in a long line of acquisitions by the mothership in recent years, especially in Europe where the value of the sector is estimated to be close to $30 billion a year.

One difference between BedandBreakfast and much of remainder of the HomeAway portfolio (and, increasingly, TripAdvisor-owned sites) is that reservations can be made on the site rather than through the property owner.

The new European sites will be found at BedandBreakfast.fr, BedandBreakfastespanol.com, and BedandBreakfastitalian.it.