If you cross over into another vertical, internet shopping, large aggregator shopping engines such as Shopping.com/Kelkoo etc were being bought and sold by big media groups 3-5 yrs ago for around the $500million mark.

Since then, innovations have crept into the internet shopping vertical (eg social shopping, mass adoption of cash back engines etc) and individual retailers have become much more savvy in how they address customers direct.

This has damaged the large aggregators. I can see the same thing happening in the travel/tourism vertical. I’d say having one company with something like $300m investment so far will make others innovate which is a good thing.

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We have said that HomeAway is probably one of the most interesting companies currently in the online travel industry, for many reasons.

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I think these mega-mergers present a big problem for holiday rental owners – that of invisibility.

This applies in our case – an off-the beaten-track destination which never features on the list of ‘popular destinations’ on the first page of these rental websites in spite of the fact that we have to pay the same fees as those in the countries which are listed.

But it also applies to people in the most popular destinations, where they become increasingly submerged in a mass of properties in the same area, especially now that so many people are jumping into the rental market to try to defray the costs of their holiday houses.

As does this concentration actually benefit the consumer? I don’t think so. When you land on the first page for the area of your choice and see that you have dozens of pages featuring hundreds or thousands of properties to wade through, don’t you feel a little overwhelmed and wonder how to really choose what you want?

How do you know that the perfect property for you isn’t lurking near the bottom of page 56 or whatever. And can a mega site really guarantee any kind of quality?

OK, the reviews help, but noone can seriously think that a mega site is really going to care about the quality of each individual property.

I totally agree that we need more niche sites. But these often give more attention to the particularities of their niche than to boring things like SEO and getting more visitors to land on the home page.

We have been approached by sites targetting families with babies/youngchildren, those with allergies, dog owners, ecofreaks etc. etc. The ones we have tried mostly just don’t deliver the visitors and therefore enquiries and bookings.

In fact, the only specialist ones which do succeed are those which actually manage to hack it in the mainstream i.e. a lot of the people visiting their sites are just looking for holidays, not holidays in that particular niche!

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Great post!

I think that independent owners are worried at what they perceive as a reduction in choice as the consolidation happens. They are concerned that it’s going to mean higher costs and lower service levels because of reduced competition.

All markets tend this way – it’s been happening in software for years. The difference here is that the web allows us all to compete – these guys are just a convenience and not a necessity.

In fact this is still a pond in which the small independent operator can swim very successfully.

I operate two self-catering pine lodges and have, as you suggest, videos and links to review sites. I only use one paid feeder site and that is a local one.

There will, of course, always be people who need to use the big boys.. This may be due to lack of time, knowledge and or resources, but there is still plenty of room for innovation and independence in this market. It takes a bit of time and effort but you aren’t forced to use the mega sites.

I also think that potential guests appreciate seeing small owners making an effort and being individual rather than trawling through endless similarly formatted listings.

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Sorry I thought you were talking about niches sites and innovation so I provided what I hoped were good examples. My mistake.

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Owners can also be consumers. We certainly are and it can be a great learning process. I would always prefer to look at an owner’s own website rather than reams of identical listings. Some owners’ sites are so bad in terms of what they do not tell you (and their photos) that you can dismiss them very quickly. When I am looking for somewhere to rent, I will use the listings sites to identify some properties but then I Google to find their own sites.

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Yes, been there, done that and do not struggle in the search engines!

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.. which is I think what I was saying in the bit you took exception to where I talked about niche sites (I do accept that you don’t want people spamming your blog with adverts, but it was a serious point that I was trying to illustrate with reference to a point you made in your article!!)

I think your last comment is a little generalised – many owners DO add loads of local info and that is what does differentiate us from the big sites who sometimes have a half-hearted “about the Algarve” type paragraph.

Anyway – time to bow away to allow all of the consumers to say their piece.

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What nobody has mentioned here is the difference in business models between various rental sites, which has a bearing on consumers and owners.

HomeAway has traditionally had a subscriber system, where owners pay an annual fee in order to appear in its listings. Some of the sites in the US are employing an OTA-style mechant system, where consumers pay on the host site, rather than be referred to owner.

I wonder what consumers think are the advantages/disadvantages of the two?

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I am with Darren on this. It makes no difference to how we search for accommodation. You will find duplication on numerous websites as you find on hotel websites. We are thinking about renting a villa in Florida. Previously booked with Travel city direct but the prices have shot up under Virgin.

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@Kevin, others such as Rentability are employing a pay per enquiry model and striving to do something different.

I also think Ryanair’s foray into the holdiay rental scene is an interesting one because once you’ve booked your accommodation with the owner you’ll need a flight (presumably). They have a captive audience so it seems logical to extend their service to offer more.

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From an Owner point of view; the consolidation by Home Away could have a negative effect. As Home Away become even more monstrous they are able to control the market pricing structure more effectively. Leaves the Owners with fewer and fewer options for their advertising budgets.

From a consumer point of view; it reminds me of the large property websites in the UK like Find A Property and Right Move. Although they consolidate virtually everyone’s properties, when a consumer searches they tend to see the same results over and over again. I don’t know if this takes the fun out of searching but it just seems a little ‘same old same old’ to me. Holidays are an event, they are sexy and consumers should be inspired.

From a rental company point of view; I don’t mind the fact that Home Away and so dominant. If you can take away one positive its that their investment in our area is a sign that we are still in a buoyant market. Smaller companies can still make headway by playing to their strengths. Its easier to innovate when you are smaller, develop your own business model and don’t lose the important connection with your customers which tends to happen in larger organisations.

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Gosh what a rant! Where to start…
1 Darren I think you’ve missed many of the consumer points pointed out in the earlier comments – as Margaret pointed out at the beginning, who wants to search through hundreds of pages of places in to stay in Marbella when you can find either individual websites or smaller, but equally good search websites, through Google.

2 Google is a great tool but as the websites tend to dominate the results I’ve found it’s a case of getting to know one or two of the sites, how their searches work and which, tend, to show-off the advertised homes better.

Unfortunately the search system on the homeaway sites has always baffled me, maybe it’s just my brain, but no thanks. Also their sites are all so Americanised these days – uck.

3 It does matter how you search for accommodation Rohan, unless you absolutely have no care about the credibility of what you’re booking – you know you can pick the phone up to holidayrentals and holidaylettings and ask how long they’ve been working their advertisers, have they received anything from other, previous guests that should concern me. They might not own the properties but they do talk to their advertisers.

4 If homeaway changes its model to enable bookings to happen online, as you are suggesting Kevin, then it effectively changes everything about itself. Part of the joy of browsing these sites is that you can request more information about the property, pricing and availabillity and also get to know the owner of the property a bit before making your decision.

If they’re rubbish at getting back to you, that knocks your confidence about staying there and I’m certainly more likely to pick the home that has everything I need but which I also get good vibes from the owner. Also, homeaway don’t manage or inspect any of the properties, so how could you possibly have any confidence in the property being everything you think it by simply booking online immediately. They seem to be pushing themselves off their own cliff.

5 In a similar way I don’t believe the review system on holidayrentals to be completely honest in the way that something like tripadvisor is because no owner in their right mind would want to have even a semi negative review on their website – opinion is too polarised for reviews to work in anyone’s favour on rental sites, even if it’s something about there not being a corkscrew in the drawer ( yes I have seen that one)

I hope this answers some of your questions Darren. I mean ultimately who cares who Homeaway own because the moment you use one of their sites you realise its going to be pretty hard to find anything anyway.

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Worldwide subscriber system, huummmm

Maybe in this systemic collapse economy, the best system could be as Booking.com. Free and you pay only for reservation for rental villa and customer pay only at the villa a the check out.
Wondering why all this rental villa and cottage still want to pay a listing fee in an big data base where there are just Internet page.
Yield Management & channel management have some great opportunities in this market

My 2cts

Best regards

Claude

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@Darren – ‘too much focus on the property, and very little destination/attraction content for inspiration’ (your 1.43pm post). You are quite right.

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@James @ Darren – ‘too much focus on the property, and very little destination/attraction content for inspiration’

- That may be true of the big listing sites but just look at some of the independent web sites out there – I won’t provide any examples as you’d slap my wrist again , but don’t tar us all with the same brush!

Some (many) of us smaller guys try REALLY hard to provide content rich, exciting, attractive and innovative web sites to “sell the dream”. Having said that you do have to provide a lot of info about the property itself of course – it’s all about the balance

The big sites just can’t add that value at the microlevel and that’s why their sites are so often so bland and “samey” ,and that is where the opportunity lies for the independent operators.

Some of the newer, independent, listing sites have some great and innovative ideas (like quality assessment – not ratings – but qualifying properties by taking references before they are allowed to list, which is just not something that mega sites could take the time to do – again I could, but won’t, won’t provide examples) The big boys listing game is a hard nut to crack though – the barriers to entry are now quite high (which is why Home Away are doing what they are doing – building the ramparts higher all the time- it’s a tactic common in all consolidating markets). Just look at some of the great new sites who are forced into listing free for the first year or two of their existence as they build up a body of renters.

Down at the independent end of the market there are a lot of websites who do very well by making a huge effort, being innovative and showing that we really care what we do. After a l- having caring owners is a HUGE part of what people are buying into when they spend money on a holiday.

The internet is a great leveller here because I can and do compete on my own terms with Home Away group and I do my utmost to provide a wealth of destination/attraction content for inspiration both on my web sites and in my properties.

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Hi Darren
as a property owner it’s very hard to strike the balance between large consolidated sites like VRBO or ownersdirect, and the smaller niche sites.
From the last couple of years tracking our rentals and sources, we decided this year to pull away from the larger sites, not only do they charge large fees, or around 15% of your booking, with no guarantee of bookings, but you are also “one in the crowd” and it becomes so difficult to stand out. Frequently there are 50+ other properties in our area, this makes it difficult to be seen.
Renters take large numbers of quotes from similar properties and this also makes it difficult to stand out for the quality of accomodation.
No we find that most of our bookings come from referrals/rebooking. So the key things to us are the quality of our website, and the communcation to our potential renters.

But you have to admit it’s a great business model. Ownersdirect have 27000 owners paying £150 per year – pretty good returns

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Agreed, Darren, I think it’s good news. As you say, self-catering is a sector that has not really moved as fast when it comes to technology as hotels, and integrated holiday rental booking engines are few and far between. Anything that can help the consumer find and book the properties they want can only be a good thing – nobody wants to spend hours trawling the web when there’s a good, informative directory with a functioning booking directory out there.

Of course, there’s a risk that huge indiscriminate sites like Home Stay fail to reflect each property’s unique appeal, so, yes, niche sites focusing on specific types or styles of property will be more in demand, and will benefit from having a faceless giant to differentiate themselves from. The onus will be on property owners to ensure they sign up to sites that a) are in tune with the kind of market they want to reach, and b) offer the personal customer-focused approach that mega-directories inevitably lack.

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Am not sure I agree that the big companies necessarily fail to give the “niche” accomodation owners enough attention, the sites I have looked at are excellent at getting good search engine results for long tail searches. Isn’t it up to the holiday home owners to input their own inspiration, reasons to go etc into their listing?

Consolidation can be good for consumers (the people that rent the properties) if a very strong company emerges with a bonding system to protect the consumers.

It could also suit the property owners if a global player emerges – most holiday home owners from the UK can easily fill their properties in the school holidays and half terms, wouldn’t it be great if through one system you had a global audience and you filled your property at a high price in the French holidays, Norwegian holidays, etc too.

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I agree – but if the GDS is anything to go by (full of really shoddy, uninspiring hotel room descriptions) this is a really hard thing to get people to do. hence why the need for inspirational sites who care about the presentation of a property.

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Don’t want to unearth the conversation here, but have just been going through some of the comments above. Really interesting discussion.

Speaking as a company that is a wee bit smaller than many of the sites mentioned here (just a few members of staff), we’re also welcoming changes in the industry. It can be difficult to change the minds of traditional owners though, some seem a little closed off to the idea of new technologies. In our case this is mainly online booking.

We struggle a little in the concept of where we fit in the booking process. Bookings are made on our site and we pass funds on to the owners at a later date. But is it better for consumers if we stand back and allow direct conversation with the property owner, or is it better for them if we get involved as much as possible?

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