Expedia VP Reveals That 40% of VRBO Bookings Come Through This One Feature
All channels offer hosts discount settings, and love to remind us that you probably aren't booked because we aren't using their very own Weekly or Monthly discounts, Early-Bird, and Last-Minute deals.
And you know what? They’re right.
The question is, does it really make that big of a difference if you set those discounts natively on the channel or somewhere inside your tech stack? Take last-minute deals, for example. You can set them on VRBO, Airbnb, or Booking.com directly, or within your dynamic pricing tool or PMS. At the end of the day, the effect on the nightly rate is the same. So why does where you set the discount matter?
“Partners who use VRBO promotions convert 40% better than partners who don’t. (…) If you’re not using them, you’re not competitive,” says Tim Rosolio, VP of Vacation Rental Partnerships at Expedia Group. Recently, VRBO has been catching up with other short-term rental channels and reported 1 Billion Dollars in vacation rentals.
Tim sat down with Good Morning Hospitality to talk about Vrbo’s Biggest Product Push Yet and What Hosts Need to Know. In other words, if you choose not to use discounts and promotions a channel offers, you'll pay for it, even if you're discounting your price somewhere else in your tech stack.
We know that’s true on Airbnb with custom promotions: if you set discounts outside its platform, you won't get any of the benefits: neither the Discounted strikethrough price, nor the Discount banner on listing, and you won't be Highlighted in emails.
VRBO is looking for genuine discounts to offer their guests (so are all the other channels), and you can't just jack up your price, offer a discount, and expect the OTA not to figure that out. Where you set the discount does matter.
Tim continues on the importance of native discounts: “The interesting thing is that our ADRs for the year are up, despite the fact that we’ve had tons of promotions that are coming through the marketplace, 40% of bookings are flowing through a promotion; what that says to me is that travelers are trading up; they’re getting a nicer property and a better value, which is a terrific thing for them and a terrific thing for us and it’s incremental bookings for that partner, rather than what I would consider the race to the bottom.”
He went on to say that he's most excited about the newly introduced Sponsored Listings, VRBO's new ad format. According to Tim, listings that use these promotions still have to fit the guests' search and meet a high level of hosting quality. VRBO says that the sponsored listings won’t hurt hosts, who have worked tirelessly to maintain Premiere Host status and the more recent Loved by Guests label.
Sponsored listings have been available only for a few weeks, so there is no real data on this. Still, in our experience, over the past month it has severely impacted our top 1% Loved by Guests listing (the yellow line on the graph), while our other listing without even Premiere Host status (the blue line) is being served more often than the top-rated listing.