We have seen more and more listing models arise from nowhere, driven by the apparent frustrations of owners. I read that this is only a minority making a big noise or is there really sufficient traction to draw big inventory?

Do you think there's room in the market for a new listing website, one with a good guest / host relationship?

For example homeescape.com & ownerholidays.com - they will probably sell out too!

I'd love to hear everyone's thoughts...

Comments

jpoljpol
2 months ago

Good question @marsilius.

I think yes - but it will take a lot.

The current OTA culprits (HomeAway, Airbnb, Booking.com, VRBO, TripAdvisor etc) are constantly walking a tight rope. I'll explain...

OTAs want to make more money

OTAs are trying to make money. To make more money, they want to do two things:

1. Growth

In order to grow, OTAs need to provide an awesome guest experience. They do this via building a variety of inventory, making the process seamless and offering trust (cancellation policies).

They are all in competition with one another. Who can provide the "best" guest experience wins more guests, which attracts more inventory which in turn attracts more guests which makes more money!

2. Squeezing more money from existing customers

Alternatively, to make more money, OTAs can squeeze more money from guests (guest service fees) and from owners & managers (% of booking or % of payment).

It's a fine line between how much you can squeeze out of owners / managers in return for an amazing guest experience

OTAs are walking tightrope

For the two reasons above, OTAs are walking a tightrope with hosts and guests.

Guests

OTAs are increasing guest service fees (presumably to increase profits & fend off competition), which at some point will reach a tipping point.

A tipping point where guests realise they can save so much money booking direct, it will no longer make sense to use OTAs for their easy-to-use & trustworthy service - and by this time it will be easy and frictionless booking direct.

Owners & managers

The problems are amplified with hosts and managers. They've got to deal with increasing commissions, reduced guest communication, potentially less bookings because of service fees & ramped prices and less control over their own business.

Again, these issues will reach a tipping point, where following the OTA path will no longer make sense.

The final straw

How long can OTAs keep up this balancing act whilst trying to make more money? The question is, how far can they squeeze both sides before something explodes.

If they acted in the best interests of both parties and not themselves, this wouldn't be a discussion... my answer would be no - but that's not the case.

Is there a listing website that could do it?

Currently, my answer is no - because as you quite rightly said they will just sell to a larger corporation and we will be back to square one.

There needs to be a system entirely run by the owners and managers with no intermediaries. I'm waiting for the day.

dannydanny
2 months ago

Thanks for you post @marsilius and @jpol.

Conrad's got a good article about what it would take to unseat a large listing website here - it turns out quite a lot.


There needs to be a system entirely run by the owners and managers with no intermediaries. I'm waiting for the day.

I've taken a keen interest into decentralised networks and blockchain technology recently. You can see a comment I wrote about it here.

To summarise, I think it could be exactly what you're looking for.

The idea behind it is to build a truly peer-to-peer network that's completely decentralised or distributed - meaning no single organisation owns your data. You own your data and control how it's shared.

Source

This network could be built on new blockchain technology - the same as Bitcoin.

This way, you could ensure that no listing website could ever ramp up fees and control your business. You control your own business.

There's a few caveats for this taking off though...

  1. It's still hard-to-access technology
  2. Marketing budget to get bookings and compete with other listing websites

Number one will be addressable over time, if the technology takes off. As for the marketing budget, I see there being a small donation which can be voluntarily made by owners & managers to directly pay for marketing.

RichardVRichardV
last month

@jpol...Good analysis. Where are you based?

Nigel GoodwinNigel Goodwin
2 months ago

As I built ownerholidays myself, there are no debts or bills, so it is free to advertise at the moment, but i would be looking at around £50 p.a. per property some time so I can put food on the table. There are currently no investors.

MarkusMarkus
2 months ago

There are many alternative listing-sites! They are just not as well known as the "Big Four". And: As soon one of those is performing well, it will be sold to one of the big four. Do we desire to think about jet another listing-site? Or do we think which coordinated structures can make the direct marketing for individual owners more easy and successfull? Do we realy need another central, international, multilingual structure and battle the Big Four with their marketing and adertising instruments? How do we imagine the future of vacation rental marketing (or travel marketing at all)? How shall people promote their objects in 5 or 10 years - and how will people book? I do not think, the real alternative is "no booking fee" or "less comission". It is no innovative way to replace one part of establishment with a newcomer using the same strategies and techniques. The innovation could be "no intermediary" listing-site. Thinking about the future of VR marketing will be more peer-to-peer and less OTA.

marsiliusmarsilius
2 months ago

Thanks for your answer @Markus.

I think you're right but if that's the case there needs to be guest education along the way. Most guests don't even know they can avoid guest service fees! There will inevitably be a fight against p2p from the big four - it doesn't benefit them.

Listing sites like Airbnb are now integrating travel features beyond accommodation (attractions, food etc) and Google (an investor in Airbnb) are building products like Google Trips. By doing this, they are staying one step ahead of "booking direct" because guests won't mind paying extra guest service fees for the convenience and experience of their entire trip.

The option to book direct probably needs to provide the same or an even better guest experience for a guest to consider switching how they book travel (even if it does save money) - although this is just me rambling.

dannydanny
2 months ago

"peer-to-peer" - Exactly!

caborezcaborez
last month

Good Morning All,

I'm new here and I've been reading posts on Smart Hosts with some interest.

In response to Danny above, the distributed model is exactly what our operation is attempting to roll out.

It is all about the platform - we are using CiiRUS as our platform because it offers a distributed model - for property marketing, distribution to OTAs, real time calendars and access to booking agents (owners, PMs, Agents, etc.) as well as everything a fully featured property management and reservations platform should provide.

Our company is focused on a region, specifically Baja Cali Sur in Mexico and our name and domain name reflects exactly that - caboreservations.com. In our world, the property owner is King, he owns the asset that we all make money from. Our property manager partners are exactly that - partners. All PMs enjoy the ability to book any other PMs properties in real time and earn commission. We all market the properties on our web sites and, via the CiiRUS platform, all properties are synced with whatever OTAs the property owner is comfortable with.

I do believe that there is room for smaller operations using the power of software and regional expertise to level the playing field and succeed.

dannydanny
last month

Good morning @caborez or evening where I am - Thanks for joining Smarthosts!

I think the distributed model is the only way to truly create a P2P platform. The problem arrises when you're distributing to OTAs because OTAs are not true P2P platforms - they aggregate products and sell them.

To have a truly distributed model would require new technology similar to torrenting files where data is stored on everyone's computer. This way you're booking directly with the owner and not through a centralised platform like Airbnb or other software. One day!

caborezcaborez
last month

Thanks for your interest. Trying to keep this simple where it's actually complicated!

@RichardV

First off, I am not the developer of the CiiRUS software, see http://ciirus.com for more information. This cloud based software is normally used by PMs to manage and book their property owner's condos/villas etc. Of late, they have developed extensions to their software that allow setting up a distributed model. Because of this, we chose to use CiiRUS to base our particular business model on.

Our approach is in two phases - offering regional property managers the CiiRUS platform (for free) and then offering direct access to the software to property owners for a very low monthly fee.

As property managers sign on and become partners, they list their properties in CiiRUS and in doing so, those properties become available for all regional partner PMs to make bookings and earn commission on those bookings.

When property owners sign on, they have a choice of our regional property manager partners that they can have manage their property. The property owners have real time access to their property info in CiiRUS - their master calendar, their bookings, revenue, expenses, work orders, housekeeping. They also can make bookings on their property or other properties in our region.

@danny

The CiiRUS platform is cloud based and all data is distributed in real time. Every person (owners, managers, OTAs, Agents, vendors, housekkeeping, etc.) in the system has permission based, secure and real time access to their assigned property and financial data from whatever device they want to use. They have a Windows application and a web based UI.

Finally, visitors and guests can book listed properties via OTAs, PM web sites, owner web sites, affiliated Agents - all calendars displayed and bookings are in real time.

RichardVRichardV
last month

I'm familiar with Ciirus we actually have an API connection to them (outward from them) that hooks to our own bespoke PMS system. We channel direct onward and via other selected CM's.

I think your model works in that all inventory is in one place and there is a partnership booking opportunity. The fees owners are charged are from software Saas services from Ciirus and presumably your site gets a rev share for the marketing of their services?

The collaborative model is your local site driven from a Ciirus data feed, but extra channels are fed out through a Ciirus channel manager who rev share with the OTA's plus partner PM booking rev shares. Owners have multi booking opportunities this way.

It's a model, for sure. I wonder if owners may think that having a third party private company controlling their data and billing them plus pushing to PM's and channels is the real opportunity and not independence?

From what I hear and read and want ourselves and the real desire is independence from OTA's and to generate direct business opportunity without distribution/partners etc. Also to do this from cost effective sites that market well but do not have corporate data control and hence distribution leverage which can be "influenced" by OTA's.

This model would be using current data feeds from existing PMS and other systems or insite booking/property management technology controlled by a co-operative, that can't be leveraged/sold out to a third party or OTA. Idealist but seems popularist and we would push properties to this in a heartbeat!

RichardVRichardV
last month

Looks interesting as a concept. Can you explain more on the model. How do owners sign up, what is the cost, how do they access bookings/enquiries. Is this an equity venture etc ?

VR ownerVR owner
2 months ago

Home away forums and other forums, plus the review sites, seems to show lot of people shouting over the changes and getting very upset. Not too sure about only minority making a noise and its the guest that is deciding things these days! Minorities make noise, but others given different options may well see the benefits. Follow not lead ethos

If thats the case will the traditional lisitng site be an option, more likely a hybrid model.

Nigel GoodwinNigel Goodwin
2 months ago

Hi, I have just joined this forum, looks like a good community, I am also active on LayMyHat. I am the person who owns ownerholidays.com. I released it about a month ago, and only announced it to LayMyHat members, as I wanted to make sure all glitches are sorted out, and I don;t get an avalanche. i think ownerholidays reflects very much the comments here. I will not be selling out, because i aim to make owners the shareholders. I may retain 50%, maybe less, but I want 10,000 owners to have a shareholding. I am looking at maybe crowdfunding in the next 6 months. The idea is that owners themselves are the best marketing channel, they all have their own contacts.

marsiliusmarsilius
last month

Welcome Nigel - Apologies for assuming you'd sell out - but as you can imagine from my perspective it's hard to instantly trust new listing websites based on this premise. However, crowdfunding your project is a definitely a move in the right direction. I'd suggest giving up more percentage and cap owner / manager investment to a minimum - you want as many shareholders as possible.

Good luck with it all, I really hope your model works.

RichardVRichardV
last month

Danny has an interesting take on this and as a company that has accepted BitCoins we have looked at concept in some detail. It's far out there right now, but this type of approach gives encrypted decentralised data opportunities.

I think this is going to go forward in several ways determined by market forces and vision:

  1. OTA's will increase their positioning and inventory for a few years and stabilise. We will see new platforms being established to challenge the status quo at a local or even small national level. Owners will be skeptical of sell outs but if they generate business, will take the route of least resistance and use them.

Any listing new listing site will feel resistance initially unless it provides results and if it has global aspirations will need to address a myriad of detail elements and data integrations if managers are involved in particular. The booking trend is also now in play having been driven by OTA's, with owners and managers polarising into a desire for hybrid models. This then flows over into money management, compliance and further integration. The there is marketing expense to consider.

  1. The microeconomics of rentals combined with OTA's will flush out poor inventory but also increase prices to guests.

  2. We have seen meta search in this space and I would expect to see managers and collaboration groups feeding direct to the detriment of OTA's.

  3. OTA's need real time, instant booking for redistribution (higher prices again) and for dynamic packaging (fights cars etc). Expect to see API driven experiences hooked directly to non OTA sites in a few years.

  4. Smart technology can disrupt all this in P2P environment. As Desiree says, who is going to look after the detail/management? More managers and less owners probably.

How will it happen?

Google may be a problem but it has all the data. Imagine the ability to speak to a smart machine asking to see a collection of the best villas by reputation/space/location etc. (this could even be block chained). Then ask your AI machine to show them on a projection or VR headset and ask for the best price with easy booking.

If an owner or manager can be found (and Google knows where they all are), then the price and implementation of secure payment and insurance may well establish sufficient traction based on price and trust to secure the business direct. It could even dial a call in and ask some questions itself or put you through.

Licensed, accredited properties, (which are brand opportunities), with improved owner presentations and new forms of payments will be needed, but this AI approach removes the drudgery and friction of current searching and minefield of mixed and duplicated information.

It also removes presentation by an OTA of the most profitable property and gives a better value proposition to the guest.

Artificial intelligence will save the day!

Rod FittsRod Fitts
last month

OK, here is my 2 cents on the subject:

There is going to be a lot of transition in platforms over the next several years. Here’s what we are facing right now. Think of the market in 3 sections top, middle and fat tail:

At the top are the Large OTA’s who have the vast majority of the market. They dominate SEO because they have so much money to invest and nobody will be able to compete with them on this level. The upside is that as these platforms continue to move with impunity they will continue to alienate sectors of the market and make opportunities for new platforms.

The middle of the market is like the “No Mans’ Land” between two opposing armies. A lot of companies are borrowing millions of dollars (nothing like the amounts spent by large OTA’s) on the bet that they can grab a small piece of the market before their funding runs out. This is a hard game to play and many platforms will be left on the battlefield as they run out of time to create their market.

“Long Tail” is a term in economics that compares company sales to their costs. Companies that are in the middle of the market have costs that are greater than sales and are burning through their cash. The large OTA’s’ sales far exceed their costs and are making huge money. The “long tail” of the VR market was created by the Internet because it took the cost of launching a new platform literally to zero.

In the past, the rule was when a company’s revenue dropped to zero it went out of business but now because being on Internet costs almost nothing they can last indefinitely. These companies must employ a different strategy because they operate without debt and with very small budgets but since they can survive a very long time, they have more time to gain market share.

If you enjoy sports, you will enjoy the next several years as your see these three types of players using their unique strategies to win a share of the market. You should also keep these models in mind when making decisions about where to advertise.

marsiliusmarsilius
last month

Thanks for your answer @Rod Fitts - If only it was a television programme!

RichardVRichardV
last month

I like the analysis Rod, although many companies have investors and the vision they have been sold has been badly articulated and hence more failures to come as small rewards for heavy investments are better off sold of written off.

Nigel GoodwinNigel Goodwin
2 months ago

OwnerHolidays is currently free to advertise, and no traveller fees or any of that nonsense. Clear links to owner websites or owner booking systems. Icals interface for calendars, more interfaces coming.

vcd-andyvcd-andy
last month

Another ten cents worth... recognising the need to be in control of our destiny we are taking our marketing spend to places where we will reap rewards, as we find that the OTA's are no longer delivering. Having had a conversation with Nigel Goodwin at www.ownerholidays.com we like his principled approach to opening up a space for travellers and property owners to transact without the additional overhead created by profit hungry OTA's. In answer to the question - yes we do think alternative listing sites stand a chance. What these sites need is our collective support. Even if they do not survive what have you got to loose by giving the travelling public an alternative?

helen62helen62
last month

Agreed. Who knows if alternative listing sites stand a chance, it's just worth having a go!

To go with p2p would you need all inventory owners to be able/willing to deal with guests or have confidence in a property manager to run things on their behalf?

How would you get this to happen?

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