Vacation rentals are continuing to grow in popularity, offering travelers benefits including personalization. Here people can choose the specific location and type of home. Another appealing factor is privacy, where people can actually feel like they are getting away from the real world rather than staying in a room within a long hall of people. This trend is particularity appealing to millennials.
This trend has meant other players in the travel space (like large hotel chains) are drawing inspiration from the benefits vacation rentals bring, offering similar perks that travelers are seeking. To discover more, Digital Journal spoke with David Kolodny and Phil Santoro, founders of new rental search platform VacationRenter, to discuss some of the ways big players are following the trends of vacation rental startups.
Digital Journal: How has the vacation rental market changed in the past five years?
David Kolodny: We’ve seen massive growth in the vacation rental market over the past five years. In our eyes, the most impactful advancements in the space have been centered around two of the most important factors in hospitality: convenience and reliability.
With convenience, with more and more homes available via instant booking, booking a vacation rental can be done quicker than ever before. For reliability, as the market matures, we have also seen platforms and property hosts deliver higher levels of consistency and reliability when staying at a vacation rental.
DJ: Are people looking for something different with vacation rentals these days?
Phil Santoro: One big trend we see is that with so many options at their fingertips, people are seeking a more unique experience from their vacations. They want to customize their journey, from the place they stay down to the food they eat. They’re looking for more flexibility, a sense of DIY adventure, authenticity and privacy. Rather than taking a “cookie cutter” vacation, they’d rather go off the beaten path and feel like they’re truly getting away from their daily lives.
DJ: What is the appeal of vacation rentals, compared to other options such as hotels?
Kolodny: Vacation rentals offer travelers the benefits they’re looking for in order to personalize their experience. For travelers looking for a more unique experience, vacation rentals stand out from large, corporate hotels, feeling more like a getaway. Since many of the rentals are homes, it helps make the stay feel more authentic – like you’re already part of the local community and immersed in the culture.
DJ: Are many companies moving into this space?
Santoro: The vacation rental industry is expected to reach $194 billion by 2021. It’s growing fast, and many new players are moving into the space from technology platforms to property owners and everything in between. As with any fast-growing space, there is a ton of innovation happening from all sides of the market.
DJ: Does this include major chains?
Kolodny: All the major hotel chains have a common goal in providing a great experience for their guests. Vacation rentals provide these companies another avenue to reach and host potential guests. For example, Marriott International recently announced a new home-rental offering in London under Marriott’s Tribute Portfolio Homes brand. The six-month pilot will make 200 homes available for travelers looking for a more authentic travel experience. As the vacation rental market continues to grow, we think there will be a lot of traditional hotel companies working to innovate in the space.
DJ: How did you go about devising VacationRenter?
Kolodny: Our startup studio that founded VacationRenter, Wilbur Labs, takes quarterly company offsites. We book vacation rentals so we can get out of the office once in a while and work from another city. On many of our early trips, we loved the rentals we stayed at, but noticed an ongoing problem with the booking experience – it took a lot of time to find the right one. We soon realized we could leverage our own technology to impact the vacation rental industry and make things easier. So, we did just that.
With the automation tech behind the platform, VacationRenter eliminates the need to search across several different sites and scroll through pages of irrelevant results just to find the perfect home away from home. We bring all the rental options from the leading travel sites together in one place and showcase only the best results.
DJ: What makes VacationRenter different from your rivals?
Santoro: When you look at most of the big players in the vacation rental space, they’re focused on being the biggest. We recognize that being the largest metasearch engine doesn’t actually help consumers find the perfect rental. So instead, we focus on a long-term solution – using automation and personalization to not just have the largest inventory of results, but to provide the results that are closest to what the user is looking for.
DJ: What types of technology do you use to attract customers?
Santoro: VacationRenter uses automation and AI to help travelers find the perfect rental. We both previously worked at Google where we saw company after company using slow, manual approaches to user acquisition. Without an automated approach, it is really hard to efficiently connect customers with what they were looking for – especially at a large scale. We take a different approach and run growth with a product mindset, applying automation to every part of the process.
While we cannot share specifics on everything our technology does, what we can tell you is our technology layer serves as a central brain that is connected to every part of the business. It applies advanced logic to efficiently maximize growth across product and marketing. Thanks to this automation, VacationRenter exceeded an annual run rate of $100 million in gross booking value only two months after its launch.
DJ: Do you make use of data analytics to improve your business?
Kolodny:We are always learning from our users and believe that data can play a big role in product improvements. Two months after our soft launch, we completely rebuilt the UX based on testing and user feedback. By responding quickly and incorporating updates on a regular basis, we’ve been able to improve rapidly and drive sales growth.
DJ: What else is in store for the vacation rental market?
Kolodny:While there have been big steps forward in the last five years, we are confident that the next five years will bring even more innovation and growth in the space. In particular, we believe that automation and AI will play a big role in how easy it is to find a vacation rental so that five years from now, the discovery and booking process is even more seamless.