Here at Bluetent, we talk a lot about making “data-driven decisions.” Our expert team always advises our Insiders to take into account the abundantly available data when making choices regarding their businesses.
With that in mind, we asked Bluetent’s Chief Product Officer, Braeden Flaherty, to talk about our 2020 data and how vacation rental managers can use it to help formulate their plans for 2021.
What’s the story about our Insider listings through online travel agencies (OTAs) in 2020?
FLAHERTY: We thought it would be interesting to analyze the reservations data for bookings made in the final months of 2020 and see how 2021 is setting up. Compared to the same period a year earlier, our Insider listings — those booked through our channel management tool, Boost™ — on OTAs such as Airbnb and Booking.com saw a 32% increase in average daily rate (ADR) in November and December. The numbers we’re seeing don’t just demonstrate a rebound, they show that the demand for vacation rentals has actually increased. And that has resulted in increased revenue for our clients.
What traveler trends do you think are responsible for this big change in ADR… and how can vacation rental managers take advantage of it?
FLAHERTY: While the hospitality industry as a whole has a long way to go before a full recovery, the vacation rental segment is experiencing a striking rebound. Changing traveler preferences and behaviors favor the short-term rental industry, especially companies serving domestic resort destinations, drive-to markets, and rural getaways. Despite lingering uncertainty, savvy managers have been watching demand rise and priced their inventory accordingly.
A key datapoint to consider when setting OTA pricing and policies is booking lead time. Guests booking via an OTA tend to book much closer to their stay than those booking direct, so it’s key to market your OTA listings with the last-minute traveler in mind. To illustrate, the average booking lead time for Airbnb bookings made via Boost™ in the last quarter of 2020 was about 28-30 nights, while reservations via direct bookings were made, on average, 80-120 nights out! This stark difference underscores the fact that vacation rental managers can’t just carbon copy their direct booking policies, pricing, or even descriptions for their OTA listings. Instead, optimizing listings to suit OTA traveler behavior is essential — and a tool like Boost™ can help.
Looking at the other half of the online booking equation — direct bookings — what are you seeing in terms of transactions through our Insiders’ Rezfusion direct-booking websites?
FLAHERTY: The story with direct bookings this last quarter was VOLUME. We’re seeing remarkable growth in the volume and share of transactions taking place on all three of our Rezfusion Web platforms. Unlike the big shift we saw with Boost™ listings on OTAs, Bluetent Insiders have only experienced a modest increase in ADR on their direct reservations. However, value per reservation has increased significantly. We can attribute this change primarily to an increase in average stay lengths, which fits with the “flexcation” trend (where people extend trips to make them most of remote work) we’ve seen industry-wide since April.
Why do you think that is the case? How can vacation rental managers capitalize on that trend?
FLAHERTY: For a lot of our customers, it’s a testament to their brand: they’ve invested in a robust online presence, built their business by providing amazing experiences, and cultivated a customer base of folks who will come back again and again. Confidence and security were in short supply this year, so families looking to travel had good reason to book direct with companies they know and trust.
Beyond ensuring a memorable stay for all of your guests, vacation rental managers can capitalize on this trend in a few ways. First, make sure to keep in touch with your past guests using creative, consistent, and targeted email campaigns. Second, because travel policies are still changing rapidly in many markets, monitor your social channels and inquiry forms to quickly respond to guests trying to sort things out. Lastly, don’t take your foot off the gas! The more qualified guests you can drive to your website the lower your cost of acquisition will be, so continue to invest in both organic and paid channels.
What’s your takeaway when you consider these two statistics from 2020?
FLAHERTY: The rebound from lows in March 2020 has been remarkable. In fact, Bluetent Insiders saw an average of 10% increase in transactions and a whopping 50% in revenue year over year! All of the data signal great things to come for the short-term rental industry. While we can expect some regional setbacks, the pandemic has crystallized the importance of leisure travel for millions. With vaccine distribution underway and travel restrictions lifting, more and more consumers will be able to plan vacations with confidence.
*Data for this blog post is compiled from Insider property listings on both Bluetent’s channel management solution, Boost™ and Bluetent’s Rezfusion direct-booking websites.