HomeAway beating the odds to capture Asia’s vacation rentals market
IN the volatile world of accommodations, vacation rental site HomeAway is slowly emerging a winner for its clear USPs and brand trajectories.
Where hotels are pushing for direct bookings and facing competition from house-sharing models such as Airbnb, HomeAway is a leisure-focused platform that encourages guests to book whole units for vacations.
A recent marketing campaign built upon the brand’s idea of promoting “The whole house. The whole family. The whole vacation”, as well as showing leisure guests why upgrading to a holiday rental outweighs staying in a hotel or paying to sleep under the same roof as a stranger.
In fact, that’s how HomeAway sets itself apart from other hospitality players – that is to offer the comfort of larger spaces, the conveniences of a home like a well-equipped kitchen, and often, luxuries like private pools.
According to a study by ForwardKeys, family travel is still a key driver in the Asia market. This is especially illuminated during the Chinese New Year season where families tend to travel in groups.
Particularly in China and India where tourists often travel in larger parties or with extended families, HomeAway presents itself as an ideal vacation rental model.
HomeAway Asia vice-president Prashant Kirtane told Travel Wire Asia, “With many families living geographically farther apart, a multi-generational trip is often the only option for today’s modern and mobile family.”
Acquired by Expedia in late 2015, the rental platform benefited from the takeover by being integrated with 40,000 global Expedia vacation rental listings.
Kirtane said, “In the long term, we expect to derive significant benefits by leveraging Expedia’s distribution, technology and expertise to provide an even better product and experience for our owners, property managers and travelers.”
The Expedia buy-out also helped put HomeAway on the map, driving revenues for the brand. Last year, the platform recorded US$6 billion worth of gross online bookings, equating to 22 million room nights and a spike of 46 percent year-on-year.
Despite early growth since the acquisition, it’s not always a bed of roses for HomeAway. Kirtane expressed one of the biggest hurdles the brand faces is a lack of awareness about vacation rentals.
While the concept of vacation homes is more common in the United States, Europe and Australia, it’s lesser so in Asia as a viable accommodation option. He said just three years ago, less than 40 percent of US millennials had stayed in a vacation rental – a figure that was lower in Asia.
“There are still millions of travelers who have not experienced staying in vacation rentals and we aim to change that,” he said.
“Staycations” – the concept of booking a hotel or a rental in one’s home country – too, are becoming less of a rarity in Asia, especially in Malaysia.
Kirtane commented, “The unfavorable exchange rate coupled with the development of theme parks and shopping malls across many cities in Malaysia has made the prospect of staying at home for the holidays an attractive proposition to Malaysians.”
Perhaps, before the introduction of platforms like HomeAway and Airbnb, it was the lack of choice that hindered Asians from warming up to private home rentals.
In present day, tapping into the Asian market means in large part tapping into China and India’s colossal demand.
The industry must also take into consideration domestic and intra-region travel across markets in Southeast Asia and North Asia are on the rise, particularly out of China.
To leverage on the China opportunity, HomeAway partnered with and invested in Tujia.com, China’s largest online vacation rental site, to increase the exposure of their listings.
The partnership – facilitated by Expedia – is a clever move that gives HomeAway a one-up on Airbnb in China, which is crumbling beneath competition from Tujia and poor brand recognition.
— HomeAway Asia (@homeaway_asia) October 6, 2016
Meanwhile in India, HomeAway has inked a partnership with Tripvillas – which has offices in Gurgaon and Mumbai – to establish a presence in the Indian market.
“Today, we continue growing our footprint in India by focusing on increasing quality supply in key Indian tourist destinations and providing a wide selection of properties to outbound Indian travelers,” Kirtane said.
He said consumers in China and India are very different to those from the West, and vacation rental players are still figuring out how best to cater to their needs.
On top of that, the regulation nightmares that often plague Airbnb are also proving challenging for HomeAway. The sharing economy has suffered a bad rep in countries such as Japan and South Korea, where regulations are not clear-cut.
Kirtane said, “We advocate short-term rental industry regulation needs to work for all stakeholders in the community: owners, travelers and neighbors.”
In the age of disruption, Kirtane and his team hope to work with governments across Asia to address concerns surrounding regulations and the development of the short-term rental market.
As with most sharing economy models, quality assurance can be tricky to monitor. In the case of HomeAway, complaints are often resolved between property owners and guests.
“For complaints such as poor conditions of the property or other mismatches between the property description and experience, we especially encourage travelers to post a review,” Kirtane said.
Just like that practised by Airbnb, owners too can view the ratings of their potential guests from their previous stays to ensure trustworthiness and general etiquette.
With HomeAway’s bullish plans to penetrate Asia’s vacation rentals market and tap into Expedia’s 450 million user base, they might just emerge triumphant.
As Kirtane pointed out optimistically, “People make memories and bond with loved ones in kitchens and living rooms, not hallways and lobbies – that’s why people love vacation homes.”