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Vacation Rentals Challenged by Issues of Trust

May 13, 2011 By: George Dooley Travel Agent



Over the past couple of years the travel industry has woken up to this heaving—if unruly—market called vacation rentals, wrote PhoCusWright’s Douglas Quinby in the recent edition of FYI.

“We know it’s big. We know it’s undergone a remarkable makeover. But it still faces a big challenge: trust,” Quinby wrote.

Quinby, senior director, research for PhoCusWright, pondered if social media will silence the vacation rentals trust issue—and, in turn, transform online travel shopping in his latest article for FYI. What follows is an excerpt of his article.

“The market is large but fragmented, with hundreds of thousands of suppliers (homeowners). It has few brands and no commonly accepted service levels or rating standards. In hotels, whether you book a Ritz or a Red Roof Inn, you more or less know what’s coming. In vacation rentals, it’s a different story. Will the property live up to the description on the website? Will it match my expectations? Am I paying a fair price?” Quinby asked.

“Several vacation rental websites and rental management companies have done a great deal over the past several years to overcome these challenges, with improved website features and content, online guest reviews, trip insurance programs and better homeowner oversight. And PhoCusWright’s research has shown that vacation rental guests are overwhelmingly satisfied with their stays (less than 2 percent of vacation rental guests are dissatisfied),” Quinby said.

But the issue persists.

“And it goes both ways. Guests want to make sure the property matches their expectations, while homeowners want to make sure their guests do not trash the place, or walk away with the kitchen sink (or the HDTV and DVD player).”

Quinby cited two significant developments in recent days that are aimed squarely at the issue.

“First came Airbnb’s launch of Airbnb Social Connections, an imaginative approach to leveraging the Facebook social graph. Most websites have used Facebook Connect to show visitors what their Facebook friends have viewed or recommended on their site. Airbnb is taking a cue from LinkedIn—which is really about forging connections, while Facebook is about keeping up with friends—to show possible connections between the renter and owner. The connections could be shared friends, or common affiliations such as an alma mater.”

“The second development is HomeAway’s recently announced acquisition of SecondPorch, a vacation rental startup whose whole vision was social from the start – finding and marketing homes via your network of friends on Facebook. (SecondPorch actually launched as a Facebook app, and built the website later after a key funding round.) HomeAway has been busily acquiring global vacation rental sites and technology firms, building out platforms for reviews, reservation handling and payments, and prepping for a pending IPO. But the vacation rental market’s online behemoth has been slow to move in social, and this pick-up could help kick-start the company’s social strategy,” Quinby wrote.

The role of social media in overcoming the vacation rental trust issue is just developing,” Quinby said. “There is still what UpTake CEO and cofounder Yen Lee calls the social “liquidity” problem: the likelihood that a traveler will find a friend’s review, recommendation or personal connection around a specific hotel (let alone vacation rental home) is slim to none. But the flipside here is that personal connections could become so important that they start driving the shopping process and product selection: online travelers will look first to potential properties where a connection exists. Wow.”


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By George Dooley | May 13, 2011
PhoCusWright analyst sees social media as a way to help solve vacation rental trust problem.
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