Vacation Rentals – Friend or Foe? What do you think?

#On My Mind – Vacation Rentals – Friend or Foe?  What do you think?
By Jay Karen, PAII CEO
Anyone paying attention to the travel industry these days knows about the rise and success of the vacation rental as a popular lodging option.  Sites like VRBO, HomeAway, FlipKey and others have skyrockted in popularity.  Many cities around the world are concerned with the increased use of houses, apartments, and condos as vacation rentals, possibly altering the culture of buildings and neighborhoods.  Everyone in our industry knows that HomeAway bought BedandBreakfast.com last year, so it brought the vacation rental question into the forefront for our industry.  But how are innkeepers supposed to see the vacation rental market?  Friend or foe?  Of course, it’s not so black and white.

Activities undertaken by the vacation rental industry and its major players may end up benefiting the B&B industry.  For two years now, HomeAway has run commercials during the Super Bowl promoting the hotel alternative.  Since B&Bs compete with hotels (and we do, for those who say we don’t compete with hotels), I like this advertising.  It gets people thinking about alternatives to what can be the “cookie-cutter” experience.  HomeAway received a big infusion of capital from Google Ventures not long ago, and they recently filed to become a publicly-traded company.  The escalating scale and scope of this company will hopefully mean more propaganda to get travelers moving in the direction away from hotels.

Popular vacation rental web sites also provide another distribution channel for innkeepers to market their rooms, cottages, or cabins.  Not all rental opportunities on these web sites are condos and entire houses – some property owners rent rooms as well.  Many innkeepers have months during which occupancy drops to single digits.  Vacation rental web sites may be a great place to experiment with renting the entire B&B out to groups for days or weeks at a time.  I know several innkeepers who are having great success renting rooms on sites like HomeAway.  Think about it this way – there could be some kind of corporate sales training or other group-type function happening near you, and people booking blocks of rooms may not be thinking “B&B” when doing their homework.  But I’ll bet many are looking at vacation rental web sites.

One thing in particular I like about the HomeAway purchase of BedandBreakfast.com is the possible cross-pollination of opportunities.  Maybe HomeAway will find a way to market B&Bs to their vacation rental customers.  Maybe there are technology or marketing ideas that are highly successful in the vacation rental world that will find their way to the B&B world.

But, I do have concerns about the rise of vacation rentals.  When I think about the Gen X and Gen Y traveler – heck, maybe all travelers – and their likes and dislikes, I cannot help but be concerned about vacation rentals.  More and more, travelers seem to want it “their way” and they want it to be fast and easy – everything from the search process to the booking process to the on-site experience.  Some of the top reasons people don’t stay at B&Bs are the real or perceived notions that they will be forced into social engagement with strangers (that includes the innkeepers), that they will have to deal with policies and procedures that make the experience difficult (and which exist to make the lives of innkeepers easier), and that they just don’t know what they’re going to get when they arrive.  Will it be quiet or noisy?  Will the food be good or bad?  Will the innkeepers be absent, perfectly present or intrusive?  Who knows, right?

With vacation rentals, people oftentimes get the benefit of having a nicely decorated and clean experience that rivals just about any typical hotel experience.  When I say nicely decorated, I mean that many are outfitted like upscale homes.  Most have kitchens or kitchenettes – some might even be stocked with rations.  Vacation rentals can feel like “home away from home,” which been the calling card of the B&B industry.  Most have free WiFi.  There is likely no concern from travelers that they will have to encounter anyone but the people they are traveling with, so no fears of socially-forced/socially-awkward possibilities.  They can come and go as they please without worrying about bothering other guests or the innkeepers (I’m in someone’s home, so I better be on my best behavior).  And, they can be found in just about any town or city where B&Bs can be found.

Of course, we know that the best of breed in the vacation rental market cannot compete with the best of breed in the B&B market.  A well-run B&B by a caring innkeeper, who has figured out the right recipe for taking care of all kinds of guests and their wishes provides something that no vacation rental can – the warmth of hospitality.  That’s not my concern, because I know that travelers who get the “B&B bug” after staying at one good B&B will come back and come back often.  What I am concerned about is being bypassed completely by travelers have never stayed at a B&B, who get the” vacation rental bug” after a good experience, and who harbor the prejudicial stereotypes that the average traveler harbors about B&Bs.  Why risk staying at a B&B, where the experience could go either way?  Why not stay at a vacation rental where there is a good chance the experience will likely be what you expect?

Maybe this is another reason why we need the Better Way to Stay campaign more than ever.  Maybe the hotel market is not what we should be worried about.  Friend or foe?  If you’re not using what that industry has to offer innkeepers, then they’re only a foe.  If you are using what they have to offer, then they could be more friend than foe.  What do you think?


Jay

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