Consumer mindset about where to rest a tired head when traveling is changing, thanks in part to marketing and the publicity generated by Airbnb, the online room- and home-listing site, and vacation rental mega-sites like HomeAway.
Not surprisingly, the travel agent channel is finding ways to cash in on this new attitude.
“For some, staying at a hotel will become an unusual experience, and staying in a home will be the norm,” predicted industry analyst Henry Harteveldt.
Vacation rentals, he said — typically second homes offered for short-term rent by their owners — are benefiting from the buzz generated by collaborative-economy companies in general, and especially by Airbnb and HomeAway.
The number of Americans who stayed in a private home, apartment or condominium for leisure-travel purposes jumped 86% last year, according to PhoCusWright. And
HomeAway, a business-to-consumer site that gets some business from travel agents, said its own research revealed that unaided awareness of vacation rentals nearly doubled between 2009 and 2013.
Supply is increasing even faster. HomeAway, for example, launched in 2006 with 60,000 listings in 90 countries and now has a million listings in 190 countries.
“There’s a big pile of demand and a big pile of supply,” said Steve Caron, vice president of vacation rentals with Tourico Holidays.
Vacation home sales are skyrocketing, experiencing 47% growth since 2011, according to HomeAway. And the 2014 Investment and Vacation Home Buyers Survey by the National Association of Realtors revealed that 89% of those newly acquired second homes will be available on the vacation rental market within a year.
That spells opportunity, and several distribution channels, including travel agents, are cashing in on that growth.
Three major vacation rental providers who have long worked with agents are reporting double- and triple-digit increases in travel agent bookings. Travel Impressions’ Villa Experience, for example, saw 100% growth year over year in 2012-2013 and is forecasting 50% growth this year.
Villas of Distinction said that as of early May, travel agent bookings and revenue were up by double digits.
Steve Lassman, Villas of Distinction’s vice president and general manager, said the company saw “significant growth in the past year from agencies that are outside of these traditional luxury travel agencies.”
The West Indies Management Co. (Wimco) also saw double-digit revenue growth, according to President and CEO Stiles Bennet.
This has long been a highly fragmented and idiosyncratic segment, but several companies are bringing to the marketplace new distribution technologies that enable them to target travel agents.
“From a historical perspective, this is an industry that has not been very connected to either consumers or travel agents,” said Julian Castelli, CEO of VacationRoost, which works with agents and has partnered with Apple Vacations since 2011.
That has changed. In the past two or three years, vacation rental property management companies have invested in property management systems, Castelli said.
His company and others, including BookingPal, Tourico and FlipKey, to name a few, have invested in technology platforms that integrate with these systems.
As a result, they have the ability to showcase a property’s unique aspects with scores of photos, text, maps, floor plans and more.
In fact, these technology platforms are bringing hotel-like distribution to the vacation-rental industry, including real-time inventory and booking.
VacationRoost recently acquired LeisureLink, which provides vacation-rental content, mostly condos, to the GDSs. With the LeisureLink acquisition, VacationRoost offers a total of 200,000 properties, 60% of which are online, either in the GDSs or on VacationRoost.com.
Another player, BookingPal, which has an inventory of 163,000 properties available in real time, operates an agent portal and is working to secure GDS connectivity.
Tourico Holidays’ Book by the Door technology provides agents with high-resolution photos of properties, direct connections to property managers’ calendars and real-time pricing for 20,000 properties, with plans to add 15,000 to 20,000 more in the next quarter.
Wyndham Vacation Rentals has 103,000 vacation rentals with real-time booking.
All these companies vet the properties they book and arrange for staff to visit them. Some have people on location doing inspections.
Yet, despite improved connectivity, quality control remains key for this market, especially for travel agents.
“Guaranteeing the quality of what you’re buying is hell,” said Mike Estill, COO of the Western Association of Travel Agencies.
In addition, established players rely heavily on the human touch. Villas of Distinction, Travel Impressions and Wimco have a robust online presence rich with enticing photos of villas, maps, interactive floor plans and detailed descriptions of properties.
They have availability but usually book only over the phone because, Lassman said, booking a villa is a “very consultative process.”
Other players in this sector are also providing human backup. Tourico, for example, maintains three res centers staffed by experts. VacationRoost describes the destination experts in its call centers as the “travel agent’s travel agent.”
Most of the vacation-rental distributors working with travel agents contract for inventory only with professional vacation rental companies with which they are familiar and that have established track records. They tend not to work with individual owners.
“Most of these providers [distributors] have performance or satisfaction guarantees,” said Ben Edwards, president of the Vacation Rental Managers Association. In addition, he said, they are working with association members, who subscribe to a code of ethics and service standards.
Most distributors pay commissions, which can add up to thousands of dollars in some instances. Others, including Tourico, give net pricing, enabling agents to add in service fees and thus control their own margins.
Many pay commissions on other elements of the trip, such as tours, ski rentals, ski lift tickets and ground transportation.
Follow Kate Rice on Twitter @krtravelweekly.