I’ve worked in the larger travel industry for over 20 years, and during that time I’ve witnessed a great deal of ‘disruption’, as well as much stagnation. I remember when airline tickets used to be mailed out to us to send on to customers and were sometimes even handwritten. And honestly, I’m really not that old!
Travel agents were not online but on Main Street, and reservation requests were only ever faxed. Sometimes you even had to wait 48 hours before being able to confirm a booking.
Connecting directly with customers via social media was a fantasy, and no-one wanted ‘online’ PR coverage. Ever. If it wasn’t featured in print, then it didn’t count. By far our biggest marketing spend was getting the once-a-year (no room for dynamic pricing there) 100-page catalogue printed and mailed out.
Arguably the only real ‘disrupter’ we have seen in perhaps forever has been Airbnb – a brand that over the last 10 years has managed to make staying in someone else’s space when travelling not only desirable but also mainstream, accessible, generational and international; and has opened a marketplace for hundreds of thousands of new suppliers, let alone customers. Now that is a real disruption.
Back when I was first working in travel, travel agents were predicted to be in decline. The internet and the rise in the ability of travellers to book travel products both easily and often cheaper, directly with suppliers, put into question the relevance of third parties. In response, the travel agent model went online and become dominated by a few big brands. What didn’t change was the need for consumers to have their hands held through a travel purchase. For consumers to be presented with plenty of choices, and for there to be a significant level of trust in their booking decision. Price is not always the deciding factor of where and how a guest will book.
By far, the vast majority of vacation rental homes are still managed and marketed by individual owners or small operators, with the four largest property managers in the US managing just a 1% fraction of the inventory. Being so fragmented, you can see why vacation rentals are such an interesting topic for everyone from Skift, major hotel brands, through to Google and to the dynamic young urban entrepreneurs entering the market. There is still huge potential in vacation rentals, but the big question is how do you impact change on such a beast?
I’m not going to pretend to have the answer to this question, but I know what I’m going to be keeping a close eye on over the next few years and these include the following:
The mind-boggling intricacies of this emerging technology is beyond the scope of understanding for most of us, but the potential for blockchain technology to revolutionise information sharing, connectivity and transparency is huge. No one (outside of a few) anticipated the revolution of the Internet either.
With the rise in smartphone ownership, Travelport predicts that 70% of all travel bookings will be made via mobile by 2020. But what about a post-mobile world which is happening sooner than we think? Who needs to tap into a phone when you have your own personal voice-activated assistant? Think the iWatch and other wearable tech. Anyone with kids can see this coming.
I now always buy my flights through Google Flights. I’ll never go back to searching in any other way. Google is on its way into vacation rentals. There are significant challenges for listing vacation rentals as a search option, but I have no doubts that the clever minds at Google will work out a way, and soon, to seamlessly integrate rentals that offers a better search experience for the customer.
‘New’ breed of property managers
I am fascinated by the emergence in a short few years of many very successful property managers that have been born out of the Airbnb opportunity and have ambitions to dominate the private accommodation space in our urban centres internationally. Most of these, inherently tech-led companies, are headed up by young, entrepreneurial risk-takers (some with significant funding) who are changing and challenging traditional property management. Watching them grow and transform is fascinating.
A technology that really connects with guests and can assist property managers to both anticipate and meet the needs of guests throughout the customer journey has the potential to transform. Personally, I’m not wholly convinced by Alexa and Google Home in properties. I think guests will prefer to use their own devices. Finding other means to build and foster loyalty and develop a trusting relationship is something that has the power to change the way guests experience the purchase and stay in a rental.
The next few years are going to be very interesting for the wider short-term rental industry. Let’s watch this space!