Vrbo is not Airbnb’s problem – WSJ
The host battle between Expedia‘s
Vrbo and Airbnb ABNB -2.26%
seems to be fully effective, but the reality is that Airbnb has bigger fish to fry.
Vrbo has been luring Airbnb hosts for months now with ads suggesting its platform is more lucrative, which Airbnb has denied. In March, after a pilot period, Vrbo launched a program to attract top Airbnb hosts by providing increased visibility for new properties and pushing their review rating from the Airbnb site so that hosts can join its platform with immediate status.
It seems to be working. Vrbo said it has involved several thousand hosts in this program, which has resulted in a significant increase in the value of bookings and nights booked per ad for these hosts. Neither platform outwardly discourages cross-listing, but it is time consuming and somewhat complicated, so many hosts with a single property don’t do it without the help of a manager.
While data from the short-term rental analytics platform AirDNA shows that Airbnb has increased the total number of its active listings over the past 12 months, the travel information publication Skift reported that ‘Airbnb had lost nearly one in 10 hosts in the 12 months ended March 31, citing data. from Vacation Rental Data Provider Transparent. These data show that single-property hosts made up over 70% of Airbnb’s total host population at the end of the first trimester.
As demand returns, it’s clear Airbnb has a host issue. Some feared sharing their homes during a pandemic; others were angered by the company’s decision to offer customers refunds for canceled reservations when it took over. Vrbo posted tips for hosts, but ultimately let them negotiate refunds on their own.
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But in the grand scheme of things, Airbnb matters a lot more to Vrbo than the other way around. Vrbo says it has over two million listings, although not all of them are active. Airbnb says it has 5.4 million active listings.
Skift reported that Vrbo spent more than 10 times what Airbnb advertised in the United States in the first two months of the year, citing data from Kantar Media. Expedia doesn’t detail Vrbo’s financial data, but it spent 53% of its first-quarter revenue on sales and marketing. Airbnb spent less than 26% of its revenue on its equivalent item this quarter, including even launching its first large-scale marketing campaign in five years.
Vrbo has historically focused on the US market, where the short-term rental market is undeniably hot right now. Jeff Hurst, president of Vrbo and co-head of marketing at Expedia, said it was the best start to the year Vrbo has ever had. But it’s possible that new Vrbo hosts will be making more money than usual right now due to the increased promotion they are getting, which is temporary. When that wears off and business normalizes, Hosts who have changed rather than the cross-listing could come back to Airbnb.
For now, Airbnb’s more international footprint is a barrier. AirDNA data shows that three of Airbnb’s 10 largest countries saw a year-over-year decline in active listings across all short-term rental platforms in February. Specific to Airbnb, the data also shows that its active listings are still down significantly in many of the world’s major urban cities, where its activity is the strongest. In places like New York, Toronto and Beijing, available and active registrations on its platform declined from February 2020 to April 2021, suggesting that the loss of some of those registrations could survive the pandemic.
It makes sense that US-focused Vrbo is currently thriving: of the top 10 countries for short-term rentals for Airbnb, only the US showed growth in April compared to the same month in 2019, according to AirDNA. Global demand was still down 31% on that basis.
That, not Vrbo, explains why Airbnb is now rushing to fix their host problem. As vaccination rates increase around the world, Airbnb is on the verge of a boom of its own, but it must have the yurts, treehouses and Airstreams on board to accommodate it.
Write to Laura Forman at [email protected]
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Appeared in the print edition of May 21, 2021 under the headline “Airbnb has a host problem, but not because of Vrbo”.