The Definitive Oral History of Short-Term Rentals, Part 3

Part Three of Skift’s Definitive Oral History of Short-Term Rentals covers the launch of Homes & Villas by Marriott International, property manager and host sentiment about Airbnb and distribution, Expedia’s acquisition of HomeAway, and what the future looks like for the sector.

Jennifer Hsieh became Marriott International Vice President of Strategy and Innovation in 2011, and Vice President of Homes & Villas by Marriott International in 2019:

We went back to Arne and Stephanie in the fall of 2018 and said, “Hey, look, this proof of concept looks right, feels like the right model, the value proposition is right, the data around performance is consistent with what our hypotheses are.” And we got permissionI was leading the enterprise innovation team, and in July of 2017 we did a partnership with Accenture and 1776. They were a global incubator based in Washington D.C. And so in July of 2017, we launched the Travel Experience Incubator. And that was an opportunity for us to reach out to the startup and innovation community and provide an open invitation for them to bring forward their best ideas on concepts and products that would make travel better.

There was one startup that we brought in called Hostmaker. they were a new company that grew out of the increased popularity of the home rental and homesharing environment. Hostmaker was essentially a property management company, about a year or so old. They were based in Europe, in London, and their basic premise was they would work with individual homeowners to prepare and manage their homes for rental platforms whether that was Booking or Airbnb.

Our job in innovation was to think about what was happening three, five, seven years from now, and as I mentioned earlier, a lot about the macro trends. And clearly, at the time, one of the biggest macro trends was the sharing economy. And this was the growth of companies like Uber and Airbnb. And so, internally, we had also built up a stack of white papers on disruptors in the industry. Internally, you’d hear about the model, or the original story of companies like Airbnb, where it was about sharing an air mattress, it felt very far away from the kind of luxury hotel experiences that we delivered as a company.

When we looked at Hostmaker as an opportunity, one of the things that came to us as an innovation team was we actually could meet a growing need that the customer had for this type of product, but still hold true to the promise that we make as Marriott. At that time in 2017, I think a couple of hotel companies like Accor and Hyatt had begun to dabble in this space. But the way they went in was they made investments or purchases in a management company. When we looked at that model, we said, “That doesn’t actually feel right for us.” Because the deeper we got into it, the more we realized that managing a single stack hotel and operating a single stack hotel is quite different than managing a highly distributed set of homes across a region or an area. 

Our aha moment was we could create a business model that actually takes inspiration from what we do with our hotel business. We could actually adopt a model (asset light) very similar to what we have in the hotel business. And really, an operating model where we worked with the property management companies, we didn’t own them, but we worked with them. And then the value for our customer and what we were solving for them was we were giving them the product that they were looking for with the right level of promise, and quality, and service that we were known for as Marriott.

We selected Hostmaker to be one of the winners of the incubator and we moved into a pilot with them. So December 2017, we decided we would pilot with them. My team then led a series of customer-centered design efforts, following our innovation process to build what we thought would be our proof of concept, we called it a POC.

And essentially what that POC was, so we took a traditional approach of going through and really going deep into the customer insights, the pain points, understanding what we were solving for from a customer perspective, looked at the financial model, we looked at the operations and service model, and we did research and building, very fast building for the next three to four months. And that entailed really doing deep interviews with customers, building sacrificial concepts, putting ideas in front of customers. I did dozens of interviews with people to understand from the customer perspective, from the management company perspective, from our internal perspective, what’s broken in the process today, how do we make it better, and how would Marriott be different in this space?

So we decided we would take one of our hotel brands, which is a soft brand called Tribute Portfolio. And soft hotel brands are intended to be different, right? It’s a collection. And so we modified that, we did an extension on that hotel brand and created Tribute Portfolio Homes, and we launched it in April 2018. We recognized immediately that to do something that was fully scaled and global in nature was not within our scope. What we did was we worked with Hostmaker and they helped us create a white label version of their site. At that time they had 300 or 400 homes. We went through, we curated out of their homes, the ones we thought that met our quality criteria. We trained their teams on understanding what does a platinum guest mean? What does a silver guest mean? What does a check-in expectation look like? How do we refine communications? We built all of the procedural things, and then we went in and did essentially an operational boost for Hostmaker. And then we launched in April of 2018 with a white label site called Tribute Portfolio Homes, and we began to see what happened.

We were very targeted about how we identified potential customers. And we knew fairly quickly within the first few weeks that we had some things really right. I think we thought our value proposition was right, which is, “Hey, look, we saw the pain point around curation, we pick the best for you. We have the safety net, so if something goes wrong, you have us to reach out to as Marriott. We’ve worked with this management company to ensure their service delivery is up to par, and we’ve audited and reviewed the product, a sampling of the product to be able to tell you that what you see on the site is what you actually get in the home.” And so within the first few weeks we began to get inklings of this proof of concept.

We felt good about it, and then about two or three months after that — it feels like we’re on two- to three-months sprints at this time — so our team is very small. We’ve got maybe four to six people working on this. And we’re doing everything. We’re doing the naming, we’re doing collateral, we’re doing the design, we’re doing the visit of the homes, and then in three to six months after that, we said, we’ve got enough where we can go back to our executive leader. Concepts like this require CEO support, really, because it’s an uncomfortable area for a company that’s done hotels for the last … 

You see it in all the books around leadership, but until you see it happen in person. Arne Sorenson was an incredible supporter, Arne and Stephanie Linnartz, both of them, they both understood the macro view. They also appreciated a certain level of risk taking. They understood the model because the model was inspired by what we do in the hotel business. And you really need leadership at the CEO president level for something that is so different for this company. And that really made the complete difference. 

Another data point that was brought to us, was 27 percent of our guests in 2017 had stayed in a home, and that meant they were leaving our portfolio. And that data point for Arne and for Stephanie was an aha moment. Why would we want 27 percent of our guests to leave our portfolio versus staying within Marriott, Bonvoy? 

So in October of 2018, we then expanded into three additional cities in Europe to validate that this is was not just an unusual circumstance in the city of London. So we validated, and we expanded it. We moved from what we called the proof of concept into a pilot.

And so in December we prepared a presentation and a pitch, essentially. So we’ve been functioning as a startup essentially with a very small team of what I call the direct team of four to six people who were working on this primarily. And we had what then I laughingly call a spiritual team. The spiritual team are all the other people within our company who believed, and advocated, and supported us in smaller, partial ways from a legal perspective, from a finance perspective, from a PR perspective, from all of those things that a traditional startup would have to either go out and buy or hire people for. 

We got the clearance and OK. And so beginning in January of 2019, we began the sprint to build Homes & Villas. And so, in the early forms, when we did Tribute Portfolio Homes, we were looking at the front-end design and were doing our own photo shoots. We had our team pose as the models on the Tribute Portfolio Homes site. I laugh because I reflect back. I mean, we really were like a startup. And it was hilarious because we were… I remember we were presenting the Tribute Portfolio Homes website in the room and we were quiet because everyone in the room was a little self-conscious. They were the models on the website page, but we couldn’t afford going out and getting an agency and doing a photo shoot that was professional. So we shot it at somebody’s home. We used somebody’s kids, somebody else posed as the mother, someone poses as the father, so it was a lot of fun. 

We did not want to crowd out Tribute Portfolio Hotels, and that was an emerging and growing brand that already had an established brand look and feel. And so we decided we would change the name and launch something. We took a very thoughtful approach, which was we’re going to name it for what it is. We picked homes because home is whatever you want to make it, it could be a two-bedroom apartment, it could be a villa, it could be a chalet, it could be a cabin. Home was our lead and it really represented kind of what we thought was the premium space. And then villas was the indicator to the consumer that we had of luxury product. And we do, we have castles, and we have private villas, and we have estates. And so that’s where we landed on Homes & Villas, and we did that internally. And then we got the OK and the green light from Arne and Stephanie in January 2019. We did a soft launch of the business at the end of April, and early May we launched it. 

The biggest difference from Tribute Portfolio Homes to Homes & Villas was Tribute Portfolio Homes, from a technology perspective, it was a white label solution. So we had one property management company, Hostmaker, that we were curating their product and so we could essentially white label their site. But once we moved into a business that we knew needed to scale — because we knew 400 homes was not material enough and it was specific in these four cities — that means you have to work with multiple property management companies, which wasn’t concerning for us, we do that with hundreds and hundreds of hotel owners. So we knew we needed to do work with multiple property management companies at different levels, and we needed to create the technology or partner with someone to have the technology to do that. By creating the Homes & Villas platform, we needed pipes that would bring the dates, rates, availability, and inventory from various sources onto our platform. We did it through a partnership with BookingPal. They’re a channel manager, their job was to create pipes. And so we launched the business with 2,000 homes in 100 destinations. In a lot of the industry and press certainly this was newsworthy, but the reality was 2,000 homes in 100 destinations that means on average, it’s 20 homes in a destination. So by the time a guest filters, you get unavailability. We quickly realized that 2,000 home was not enough. And we are currently well over 50,000 homes on our platform now. And so from May of 2019 to May of 2022, three years, my sense is that we will have scaled 30x.

We don’t have to be the biggest. So I actually don’t think that we have to have thousands of homes in every little city, I don’t think that gets to what we want, we want quality. So we don’t have to be the biggest, but we do need to have enough presence in the destinations that our guests go to from a Bonvoy perspective. 

The pandemic threw a big wrench in everything, and suddenly drive markets and domestic destinations were really important. And we were able to grow those really fast. And so, what we were able to do is to say, “OK, let’s understand the Bonvoy guests and the fact that we really want to keep them within our portfolio, let’s understand where they’re traveling and then let’s understand where they’re based. OK, we should be growing home destinations in these markets.” And so we have a very strong base of Bonvoy members in a region, we would look in that region and we’d say, “OK, where are the beaches close by? Where are the national parks close by, where are the lake houses close by, because during the pandemic, that was where consumers wanted to go, and then we would go after those markets.” 

Ivan Marenco, Despegar:

To be honest at this moment, we don’t find that there is any local player in Latin America doing business in the vacation rental market. Our competitors right now are Airbnb, Vrbo, Expedia, Booking.com.

From 2014 and 2015, when we started this until now, we have come a very long way and we learned a lot about the market. Now in 2022, there is much more opportunity than we had perhaps five years ago. It’s probably because the market is much more mature, In those days you had the owners with a unique listing, trying to get some money for the days that they were out of their house on vacation, trying to rent their house on the beach, trying to get some extra money, but it was not their main business. Today, you find property managers and a whole bunch of companies, channel managers, and people doing business there They’re making a business around this.

For the last two years — before my current role as vacation rentals vice president — I’ve been product manager director for hotels, flights and packages, for the complete lodging business. And inside my team, I had both product managers for vacation rentals and hotels. product manager and hotel product manager. And I said, “Guys, just figure out how you are going to work on the sorting because vacation rentals must be there. We have to find a way not to affect directly or not to affect hotels too much.” But I think something very smart that we did is we stopped thinking about KPIs for the vertical of each team. So we said, “OK, guys, this is lodging. Both of you have to increase the lodging business. The lodging business must grow. You two work together on how to do it. I don’t care what the mix is exactly or which one is winning or losing. Just make it work for both of you.”

Selling packages is a very big business for us in Despegar. The package business sells hotels, or vacation rentals together with a plane for a package for a week. It looked not to be the best fit for the business, but it still worked. We still sell packages with vacation rentals in a healthy way. So you had three parts, the hotels, vacation rentals, and packages, and everyone just figuring out how to move forward in a proper and coordinated way.

The pandemic hit us in mid-March 2020, but not every country in the same way. Let’s say Brazil was not so badly affected. Of course, Brazil was affected, and a lot. But when you look at the average during those cloudy days, Argentina was very heavily. And Mexico, although we found that domestic business was still not OK, but it was one of the best, and better performing.

But to be honest, we didn’t found that in our market that the vacation rental business was growing like we read that was happening in other markets. Airbnb selling more than the hotel chains — that was not something that happened to us.

I think one of the main things that happened is in Mexico, the hotel business was depressed and prices were down. The only people able to travel to Mexico were Mexicans. So we had a very good business in Mexico domestic lodging and travel. Lots of Mexicans were going to the Caribbean to big, expensive hotels that now were not so expensive and they were more affordable for Mexicans. I think our clients shifted from normal hotel to a luxury hotel, but with normal prices, not to the vacation rental business. And we didn’t find that the pandemic was something that led to our clients being so concerned about safety and controlling place where you can be with your family. That was not something that we found. The vacation rental was not at all booming during the pandemic in our business.

Jon Gray, ex-HomeAway and RVShare:

When we met with the Expedia guys (in 2015), I mean, Dara in particular, that was an incredibly impressive group of people. The thing we were doing in our business, I would say, we had achieved an expert-level status at all of the things you’d need to do to run a subscription business. We were very good at retention of subscribers. We were very good at acquiring subscribers in the first place, at knowing how to execute trial programs that get people in, all these types of things. We were built to run a subscription business. The thing about a subscription business is it’s not a conversion business. What we saw in our conversations with Expedia was a group that had an understanding of conversion at a level that we just weren’t even close to. That was one of the things where, at least from the initial discussions, I left very impressed with. I felt then and feel today that these guys were going to come in and help us execute on what was a massive pivot in the business and make it just a lot better given the conversion expertise. That’s what I saw bear out in the 15 months I was there post-acquisition.

HomeAway’s Carl Shepherd retired and then un-retired in 2015 when Expedia offered to acquire HomeAway.

Jon Gray:

The funny thing about that whole period was that Carl was retired and then he came back for this. It was funny. We announced Carl’s retirement on a Friday, and the next Thursday he’s back. Everyone’s like, “What are you doing?”

Instant Software co-founder Doug Macnaught visited HomeAway headquarters in 2015 in what was supposed to be Carl Shepherd’s last day at HomeAway.

Doug Macnaught Instant Software:

After my non-compete and imposed retirement, (I visited HomeAway headquarters) to help Property Plus customers transition off of Property Plus, because HomeAway was going to shut it down. I had never been back and I was not exactly welcome in most instances. But (some consultant Macnaught was working with) built some bridges and said, “Yeah. Go, come on. We’ll show you our staff and various other stuff.” So I turned up, and it turns out it was Carl Shepherd’s last day at HomeAway, and he was actually coming in to pack up his boxes in his offices and stuff. Carl walked into the office — the conference room was just next to his office — walked past me, and did a double take and he literally said, “Who the F let you in?” And I pointed to (one of the consultants) and I said, “He did.” And he was like, “Oh. OK then.”

Phocuswright founder Philip Wolf invited Simon Lehmann to a dinner in the kitchen of a hotel in Scottsdale, Arizona during a Phocuswright conference in 2012, and Lehmann sat next to Priceline Group (now Booking Holdings) chairman Jeffery Boyd.

Simon Lehmann, ex-Interhome: 

I had a gentleman seated to my left and I asked him “Who are you? What do you do for a living?” And he says, “Oh, my name is Jeff Boyd, I’m the CEO of Priceline.” And I was like, holy shit, OK. I said, “Excuse my ignorance.” And he said, “Who are you?” I said, “I’m Simon, I’m running a property management company in Europe. We have 24,000 units of vacation rentals.” And he said, “Yeah, I saw Brian (Sharples’) speech today and I loved that inventory but unfortunately, it’s not bookable.” And then I said to him, “Yeah, but sorry, I have bookable inventory, 24/7, all exclusive. It’s 24/7 bookable through an XML interface.” 

He said, “Really? Let me make a quick phone call.” So he literally pulled out his mobile phone, he rang Booking.com CEO Darren Huston in Amsterdam and said, “Darren, you’re going to have to meet this guy because he can bring you 24,000 bookable properties.” A week later, I was in Darren’s office in Amsterdam and said, “Here it is.” In 2013, we announced at Phocuswright in Florida, the integration of Interhome into Booking.com and that was the start of vacation rental distribution on OTAs (online travel agencies). We announced Tripadvisor a year later.

So when we integrated with Booking, I had to double my call center because we received so many queries about the product. “Where do I get the linen? How do I get the keys? Where do I put my dog? Can I bring my dog? Is it saltwater, is it freshwater pool? How far are the shops away?” You can imagine, this was stuff that Booking.com was not used to.

The HomeAway tech story is not a success story. They bought 22 companies in 12 years and mashed them together as good as they could, but the technology was so bad. They couldn’t handle our requirements. 

One of the biggest challenges we had working with HomeAway was we couldn’t push the listing up on the search result because at the time, it was still the three-tier subscription system. So where you were a platinum subscription on HomeAway, your listings were at the top and we obviously didn’t pay on listings, we paid on commission.

One thing that was very important to me at the time, I was looking in the future, I said, “One thing we don’t need to do here, if we go all in with the OTAs, we’re going to be fucked because we’re going to be totally third-party reliant.” So I invested quite heavy on the direct marketing strategy as well, but that was costly. But I said, “I need to have as many OTA eggs in my basket to mitigate my risk in having too much exposure.” And now fast-forward all these years, we see people go belly-up because they solely depend on Airbnb demand.

Interesting enough, when (vetting guests) became a challenge with the homeowners was when we started to introduce Airbnb to the mix. We were one of the first professional property managers to integrate with Airbnb. We used NextPax as our channel manager and we were the first company that had our own APIs and integrations. We were starting to distribute on Airbnb and that’s when we started to have some pushback from customers because the type of clientele had changed.

(L-R) HomeToGo’s Steffen Schneider, Patrick Andrae, Wolfgang Heigl, and Valentin Gruber at the stock market debut in Frankfurt in September 2021. Source: HomeToGo

Patrick Andrae, HomeToGo founder and CEO: 

We founded HomeToGo at the beginning of January 2014. As a customer, (vacation rentals are) much more cumbersome than finding a hotel or flight. So if there’s a problem, it might be also something that you want to or can solve not for yourself, but for everyone else. 

Airbnb did its IPO at the end of 2020, and at the same time, this SPAC topic started. Then there were so many interviews of our CFO and it was like speed dating on steroids because there were so many SPAC companies calling us. After the Airbnb IPO people said, “OK, what is also available in the alternative accommodation space, which is still private?” We were naturally basically the next interesting thing on a more global kind of level, and so we got a lot of inbound interest.

We didn’t know if this is interesting for us. We generally wanted to be ready for an IPO at some point. We also consider private fundraising. Then more about these SPAC talks came in, and we said, “Oh, maybe we will give it a try, but it needs to be a partner that fits us.” Because a lot of the U.S. SPACs back then, they got their full sponsorship just with bringing you onto the stock market, and so they didn’t have any kind of incentive after getting you on the stock market.

You also have to be a bit counterintuitive because you want the highest price, but you don’t win if the stock directly falls (after the debut). That’s how we then ended up with the Lakestar SPAC and a European SPAC . We knew Lakestar as a firm, and also we knew the founder of the SPAC.

HomeToGo has transitioned from classic metasearch, where the vacation rental booking takes place on the partner site, to taking partner bookings on HomeToGo.

Patrick Andrae:

We started all this as a pure metasearch play in the beginning. We started with a lot of big property managers. As a metasearch, you anyway have this kind of thing that people need to understand that how they measure is basically are you more efficient than Google. So that’s the main criteria basically. We qualified better and have more qualified demand than Google, and especially also due to the fact that we had also a lot of CPA (cost-per acquisition) deals. So they only pay per booking, which also makes it very risk-free, especially for the ones that might not be super-sophisticated in cpc (cost-per-click) performance marketing. 

We saw that for sure with Airbnb, there’s a new type of inventory in the city coming in that is complementing the classical vacation rental business, which at least from our perspective and from the success we saw with Airbnb at that time, we thought, “OK, this probably adds some additional market on top.” Yeah, because in a classic vacation rental country like Germany, every German knows vacation rentals.

We had instant booking. We had binding inquiry. So basically, that is Airbnb model, and then the house owner can answer within 24 hours or simply inquiry, “Hey, is this still available?” 

We acquired Tripping the same year as Casamundo in 2018. This was obviously, I think, the sign that HomeToGo is really the global leader in metasearch for vacation rentals. Google debuted a vacation rental metasearch offering several years ago.

From my personal perspective, if you compare the Google vacation rental product or with HomeToGo, I strongly believe we have the better product due to various factors. The only thing what we don’t like is the fact that Google is not applying the rules that apply to everyone. For instance, in Germany, we have almost three times the visibility of Airbnb on Google in organic results if you look at Citrix data. In the end, Google because they can put (its own vacation rental product) between the paid results and the non-paid results. Basically, it’s like they put Las Vegas in between normal stores.

I don’t know when the discussion started, if it was in 2017 or earlier. It started basically with partners that were saying, “Hey, we know we don’t have a good website that converts. We know your product is only to send out the people to our website, but could you maybe build the checkout process for us?”

We gave it a try. The first partners we put on that were also the most critical ones, where we knew they have actually good inventory, but they were not converting. And then after a few weeks, they had 10 times the bookings then before. And then a few years later, 60 times the bookings.

Aurelie Lepercq became Chief Operating Officer of London-based Edge Retreats in 2017, and CEO in 2018:

I came across Edge Retreats, I think it was at the end of 2016. The first thing that jumped out at me with Edge Retreats was the fact that I did a bit of research after I came across it and I just could not find anything that talked to the affluent consumer at the very top. Of course, you had Luxury Retreats in Canada, but Luxury Retreats was more wide ranging. I think that’s what maybe Brian Chesky has found over time with Luxury Retreats is that unless you really have a separate business looking after luxury consumers, it doesn’t work as well. So you can’t just stick an e-commerce layer, a standard e-commerce layer onto an affluent audience. It doesn’t work the same way. So I think really what’s what jumped at me with Edge Retreats was one, the lack of a player really speaking to that audience directly and exclusively. Two, the size of the market, $25 billion dollars is the luxury vacation rental market.

There are a number of differences between luxury businesses and mass market businesses. The first one is the principle of scarcity. So this is what for example, AMS, the fashion brand, uses really well. You know, you have to go on a waiting list to get a certain type of bag. And even if you are super wealthy, you still have to go on the waiting list. So that scarcity of supply is essential to a luxury business because scarcity calls desirability and desirability calls growth. So we’re never going to be at Edge Retreats an Airbnb where you’ve got 5 million listings and endless number of result pages to search from. So that’s not going to be us. 

The second one is one of price and it’s a very well-known financial concept called the Veblen Effect. And this is an economist who worked out that beyond a certain price point, demand increases as price increases. So that’s another principle we abide by in terms of what type of property we onboard. We don’t go below a certain level of rental rate per week.

And then the third principle perhaps might be — and that’s not to sound snobbish or anything like that — it’s just a positioning of that audience and that business. It is not so easy to be hyper- targeted to a specific audience at the top end, but we do that really well. 

Rhonda Sideris, Park City Lodging:

Today we use Vrbo and Airbnb. There’s a big difference. They’re owned by different companies. Vrbo tends to be a little friendlier to us, our side of it, where with Airbnb everything’s for the benefit of the guest. Covid is a good example. (In March 2020), the phone call was the resorts are closing, the town’s going to close down tomorrow. So we call an emergency meeting, Sunday, all the managers had to come in and I said, “This is what’s happening. We need to call every single guest that hasn’t arrived, every single guest that’s in town and give them the option not to come.” 100 percent refund of all the monies. And I did that because number one it was the right thing to do. But number two, I didn’t want my staff to get beat up. We are the only people in Park City, that said 100 percent refund from the beginning. When Vrbo got involved, they said we would recommend, but it’s your policies, whatever. Airbnb just said, “Strictly this is what’s going to happen.” And that was total refund to the guest. So it should have been up to the homeowner, myself, to be the hero, as opposed to Airbnb being the hero.

Vrbo (and Airbnb) they’re very close (on the prices we get through them). Vrbo is a little bit higher, but Airbnb is high enough. And my staff doesn’t agree with me, but I’m always saying, “Well, if they don’t find what they want in Airbnb, they’re going to go to Vrbo.” So I want to get rid of Airbnb. But they don’t agree with me. So we’re stuck with them for a while.

I don’t want to pat myself on the back, but I think we’ve done a great job at building our reputation. I went from 120 properties in March 2020 to probably 286 in December or January of 2021.

Glenn Fogel, Booking Holdings:

We did see some big upticks in some areas (during the pandemic). Sometimes people get confused because of the geographical mix type thing. So we’ve always been pretty, we always had a very nice number in Europe, and we’re growing in U.S. too, nicely growing up on that from where we had been. I will say I would like it to get even better, but that’s the choice of the traveler. See, that’s the thing, it’s one of the wonderful things by offering both (hotels and alternative accommodations) is that the traveler decides what they want, not us. 

Brian (Chesky) and I talk. Sometimes we’re at conferences and we’ll say hello and stuff. We’ve spoken. Yeah. Give this man credit. He created a giant business.

Airbnb has built a very big business, and (they) continue to go forward, and they even now are making some money some quarters, which is good. It’s wonderful. I think that they’re incredibly competitive with us and we’re going to continue to be good competitors against each other. And look, if I had a time machine, would I do something differently? Yes I would. In fact, if I had a time machine, there’d be a whole bunch of things I’d do differently.

I’d be willing to tell our investors, and tell everybody, that we believe the future requires us to sacrifice some of our near-term profitability to more fully invest in the future in this area, including that means going and having to put together a whole payment system back then. And it means being willing to work really hard with governments to lobby, and Airbnb has done it, lobbied a lot. Being willing to … — we haven’t lobbied with anybody at all. I want to go lobby to try and make sure that we can get the laws right to match up with what reality was. People want it. Both travelers want it and the people who are renting them out want it.

Pamala Parris Wideen became a host around 2019 in Tavares, Florida:

My husband and I had over 50 long-term rentals built up over the last 15 years. And about three, four years ago, we sold 30 of those long-term rentals. We’re going to be semi-retired and looking for investment. In 2019, before the pandemic, we bought a condo in Clearwater Beach (Florida), which is the short-term rental. We did that about two years ago. And that has on-site management. So I don’t have to get too involved in that one. And then, we had bought a small manufactured home on a lake in central Florida, in Tavares, Florida, and renovated that for a weekend home for ourselves. And we ended up buying another house about an hour away from there to be our main home. So he wanted to short-term rental that, and my husband set it all up on Airbnb and Vrbo. And then, I took over the management, the guest relations, cleaning, all that stuff. And it’s been going really great. 

Mostly, our guests are people that come here for fishing tournaments, to visit family weddings, and funerals. We just had our longest guest stay. They were snowbirds, and they stayed for two months.

We put it on Airbnb and Vrbo. I prefer Airbnb, and most of our business goes through Airbnb. Vrbo, their app is clunky, the calendar doesn’t always sync right. With the Airbnb one, I mark off a day before and a day after. I’ve got this paranoid thing that it won’t get cleaned in time or whatever. And Vrbo, you don’t have that option to mark off a day before, or a day after. And then, when you go into the app, there’s just so many more steps you have to do to access everything.

After the pandemic started, I was completely paranoid. I think a lot of people preferred to stay in a whole home. You have more control. I didn’t have any cancellations due to COVID.

I’ve never had to contact Airbnb or Vrbo with any kind of issues. For minor issues, I handle it myself. We have girls in the office, and they handle all the guest relations at the condo. That’s 19 units and they’re all individually owned. My husband’s the president of HOA (homeowners association, and he does most of the general management for the complex.

We had an off-site management company, and they gave their notice when Covid started. And we did interview Evolve and Vacasa, and they had a lot of bad reviews and a lot of bad press. Thee condos are more of a mom-and-pop situation, and we didn’t think that they would keep people in the office. And our guests there are used to having on-site contact with the office.

T.J. Clark, TurnKey:

Racism is a real issue. And we did a number of things at TurnKey in the business that oftentimes didn’t get noticed that really helped to combat it. We created a diversity and inclusion team there. I headed that up for years. One of the things we started doing is stop displaying names and photos on any resume. So if you’re interviewing someone, you can’t glean anything from that. We would not allow the screeners to see their name. They could only put them through on merits. And then yes, of course, when you communicate, you can. But we brought in a consultant who said, “Hey, if you want to start to really combat diversity problems, stop having this unconscious bias issue come up.”

Well, we carried that on, and we stopped displaying any names or photos to any owners, period. So if you’re an owner, we no longer display to you the name of the guests. You can’t come back to say, “Wait, who is this staying in my place?” And that has happened in the past. We don’t allow rating of the guests. I know that’s controversial. Airbnb does. Again, we’re going to take care of the home for you. We don’t want to get into this situation where you now have to give an opinion of someone who stayed. So I just think another great example, when inquiries come in, we do what we can to judge them on a purely revenue decision basis. And all of this is stuff that we’ve tried to get through the organization at both TurnKey and Vacasa, which also has a diversity & inclusion team. 

Jeff Hurst, HomeAway, Vrbo, Expedia:

I expect the popularity of the category to win the day over the long haul in terms of there being sensible regulation. But I think there will almost everywhere be some sort of regulation in a way that is rapidly changing. The different dynamics are that I think you’ve got an urban dynamic, which is more of not in my backyard, and on the opposite side there are property rights, and there is a great economic lever here to help property owners and really solve a problem in a lot of cases. And then in the leisure destinations it’s a little bit bad, but it’s also an affordable housing argument for people to actually work in the leisure destination.

What needs to happen generally is actually for the laws that prevent it from working well to change as opposed to new laws coming in that cap or put in minimums or maximums or taxation. But in general, the issue is really around zoning. And building more housing that is affordable or changing zoning so that supply and demand can work for long term instead of just for short term. I think every market has struggled with how to adapt zoning and build more housing, whether it’s leisure or San Francisco. And I don’t think anyone is as focused on fixing the structural issue as they are on a having scapegoat they can blame, which is short term rentals.

In terms of awareness, Airbnb’s IPO has been good for the category. There’s just no question. There’s no question and there’s challenges for the competitors in terms of … brand name and how it’s been built and what it means. I think there has never been the same type of collegial Skift conference, Phocuswright conference engagement with that company, as there are the others in hospitality. And anecdote-wise, that was really apparent … at a VRMA we had in Florida. I was a keynote and one of their founders was a keynote, and we were right after each other. I guess it was Nate Blecharczyk because it was right around the time he had taken on the China responsibility in 2017. And I remember it was a conference where I really felt good about what we had done trust-wise because he came and gave the keynote and then got on a private jet and flew to Beijing and didn’t stay and meet with the board. And I just remember people were so pissed. I remember I had finally gotten to a VRMA where everybody wanted to talk to Jeff, and people were mad at somebody else in terms of trust and how this is going to work. And it’s those little things that I think really hang with people. Like are they interested in who we are as people or businesses as much as how many homes do we have in Jackson hole?

The Significance of the Airbnb IPO and the Future of the Short-Term Rental Sector

Glenn Fogel’s Booking.com, traditionally strong in Europe, has been trying to make inroads into the U.S. short-term rental market, primarily through deals with property managers.

Glenn Fogel:

I continue to say publicly, there are lots of things in the product we need to still improve. We just did one recently where we now are offering our hosts, our partners, a liability insurance product that we did not do in the past, which is something they much want and competitors offer it. So we are continuing to improve the product. We’ve been improving the product for quite a while, but there’s definitely, I think I would say it was something that we always were aware that it was an interesting area, but we had other priorities.

Jon Gray:

I probably haven’t spent as much time as I should on housing affordability. I will give you one quick anecdote on housing affordability. In Austin, as I’m sure you know, we had a big row with the city council on whether vacation rentals should be allowed in Austin. They said that the biggest problem with vacation rentals was affordable housing. Mind you, this is 10 years ago. We commissioned a survey to find out what sort of homes were being used as vacation rentals. The average vacation rental’s property value was a shade under $900,000. Nobody’s coming off the street to live in a million-dollar house. Based on the data that I’ve seen on it, I think the impact of vacation rentals on affordable housing is overplayed. Is it true in some markets? I mean, almost certainly. Is it the responsibility of the marketplaces and property managers of the world to fix that? I don’t think so. I think it is an opportunity for the supply side of real estate developers and things like that to create more of these things. 

You can take the argument to pretty much any category. You look at it in RVs. Has the fact that we’re renting out a bunch of RVs driven more demand for people to buy them such that they can rent them out, which makes them more expensive to buy in the first place? I mean, maybe, but we’re also exposing millions of other people to RVs, which is helping to build the desire for the category as a whole. Also, I would push on this too, which is to say it wasn’t that long ago, maybe 10 years ago, maybe less, when we were talking about how millennials were never going to own homes, and everything should be rented and shared, and everything else. Now that’s changed because the millennials grew up, but I don’t think our industry has a good solve for, and I’m not sure we need to have a good solve for it.

Jeff Hurst:

I remember getting texts from Brian and Carl after we made that decision to shut down the HomeAway brands and moved to Vrbo. And it’s really like in the grand scheme of the category, HomeAway is a term built for SEO. And one of the things that happened is Airbnb picked up steam. It’s actually a term that’s built for app store, direct social sharing. There’s nothing about it that actually describes really what they do. And as we got further and further along, no matter what we did, people always talked about Vrbo. And what we realized was, especially as Airbnb was rising, more and more of the youngest users called it Vrbo. And it was because they had never actually heard it pronounced. They would basically see it in the app store or see a social tag. They were used to Uber and Airbnb, phonetically pronouncing these things that didn’t actually have a meaning. And that we felt like we had some opportunity to help that be a moment, not only for the consolidation, but to actually supercharge what people thought of the brand. That it is not vacation rentals by owner. It’s all sorts of awesome homes for families to take the best trips of their life. And I think that was a meaningful turning point and kind of how the company thought about itself and really giving us stronger putting of what we’re best at in the world. I think we’re the best at it. Oh boy, yeah. I think we had a lot of swag to give away.

Merilee Karr, UnderTheDoormat: 

And I just think that with the growth in our sector and the likes of Marriott proving that customers who stay in hotels also want to stay in short-term rentals, I think that not only are we going to see consolidation on the tech side in our sector — and maybe even some bridges between our sector and hotel residences and things like that — I think more fundamentally, we’re going to start to see accommodation as one thing. 

And short-term rentals are going to become more professional, are going to partner more and more with residential asset owners like multifamily companies, and I think hotel companies are going to play a bigger role in getting involved on the investment side, expanding brands or owning new brands, and bringing these things into the mix. And I just actually think that the next couple of years are going to be an incredibly exciting time for the market both because of recovery, and the possibilities with consumer preferences changing, but also with the things that go along with that from the investment side, the maturity of our industry, and how it’s really breaking into more of the residential property world. And so for me, that I think is the thing that we all need to keep our eyes out for, because there are going to be some big opportunities for everyone as that whole landscape shifts.