CEO Insight: RedAwning on Future of Vacation Rental Distribution

May 17th, 2018

 
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We like RedAwning and its momentum as an aggregator and connectivity partner in the vacation rentals space. Keep an eye on this one, as more channels grab for a piece of the rentals market.
— Luke Bujarski

We recently spoke to RedAwning CEO Tim Choate about his company, their growth and positioning as an aggregator and channel manager in the vacation rentals space. Companies like RedAwning are reducing friction and fast-tracking connectivity between marketplaces and vacation rental inventory. Tim said "we are looking for any partner with lots of loyal customers, and especially with travel-oriented or diverse offerings." Whether United Airlines, Google, Amazon, or Uber could function as platforms for selling vacation rentals remains to be seen. RedAwning will likely be there when and if that happens.

More reasons why we like RedAwning.

Trifecta positioning with the consumer, property manager, and channels. Strong supply aggregation momentum across a massive and fragmented alternative accommodations market. Single largest supplier of vacation homes with 100K plus properties and growing. Adding 1,000 properties per week. 60% supply footprint in Europe. Synergistic relations with the big channels including Airbnb, HomeAway, and Booking.com. Eye on expanding its channel base as witnessed by recent Choice Hotels partnership. Push beyond connectivity into marketing services strengthens position with supplier base.

RedAwning helps fast track connectivity between marketplaces and vacation rental inventory

 
 Marketplaces can connect to vacation rental inventory by 1) Going after owners directly 2) working with property managers 3) working with aggregators e.g. RedAwning to fast track the process.

Marketplaces can connect to vacation rental inventory by 1) Going after owners directly 2) working with property managers 3) working with aggregators e.g. RedAwning to fast track the process.

 

Discussion with Tim Choate, CEO & founder of RedAwning

What’s RedAwning all about?

TC: We began as a b2c play [2010]. Staying at rentals used to be so difficult. A significant portion of people that probably should have been staying at vacation rentals weren't because the friction was so high. It took so much work to find and book a place. So we started with the aim of bringing a hotel-like experience to the market. 

Who do you consider your core customer?

TC: We view ourselves as having three clients: The traveler which is where we began. We want them to have a consistent hotel-like experience. Our second client is the property manager and the third customer are the channels who we see more as partners. We're large enough that we meet with every one of the big channels at a pretty high level every quarter where we talk about what's working for us and what's working for them. 

We were the first large-scale guys doing what people now call “instant booking” because that’s all we did. Our model is 100% instant booking.
— Tim Choate, CEO RedAwning

TC: We were the first large-scale guys doing what people now call “instant booking” because that's all we did. Our model is 100% instant booking. That's really where we began. Originally we worked with owners exclusively. We quickly moved to acquiring inventory via property managers who said hey, I have one-hundred properties. Can I work with you? This helped us to scale our inventory much faster.

What do you do for property managers?

TC: We essentially help property managers survive and thrive. Most property managers are not large enough to have a full-time marketing person and a full-time tech person on staff and that’s what it takes these days. We help our property managers get access to all of the main [consumer] channels and we're growing new channels for them. 

What do you do for the OTAs?

TC: We were the original launch partner for HomeAway when they transitioned to online bookings. We did the same for TripAdvisor. We've also been Airbnb's largest client for five or six years and we're Booking.com’s largest client in the US. I think we're still Expedia's largest client so we were in early.

We also originated the concept of channel management for vacation rentals. That didn’t really exist before and for us it wasn’t really channel management. It was just marketing.

TC: We also originated the concept of channel management for vacation rentals. That didn't really exist before and for us it wasn't really channel management. It was just marketing. We had very attractive supply but we knew it was really hard to get traffic so we partnered with those that had the traffic. And then that developed into full-scale partnerships with everyone.

You also sell direct to consumer correct?

TC: Yeah we keep expanding on that we have a new consumer app so they get their driving directions, their check-in instructions, we’ll eventually have activities we’ll eventually have concierge. In every way possible we try to mirror a hotel stay. We see ourselves in the hotel world as kind of a soft brand, where we work with local property managers that each have their own brand, but we bring the collection together under RedAwning so the consumer knows hey, I'm going to have these types of consistencies every time I book.

You recently acquired Blizzard Marketing.

TC: The idea with Blizzard was really that we wanted to expand what we do for each property manager. The idea is that hey, we're doing all of your marketing and distribution, why don't we also help you with your own website. We'll shortly have kind of two website models. One of which will be what we call the ala carte model which is really the Blizzard model and one which will be a more complete full-service model that integrates with everything that RedAwning does. So really in every way possible we're trying to grow a relationship with each property manager.

How are you growing your supply?

TC: No one really knows how many vacation rental properties exist in the world [jokingly]. I've seen estimates range from 5 to 10 million properties globally so that's a lot more than what we've got [100K+ properties with 60% in Europe]. It’s a very fragmented space. A recent report pointed to over 100,000 property management companies out there. We have many of them but there are many, many thousands more. That's our primary focus now adding property managers. Our goal is to sign at least one-thousand properties per week and we're usually signing at least  that per week.

Somewhere over 50% of vacation rental properties are self-managed. Which means there are five million plus self-managed properties out there and we need to figure out how to get to that audience.

TC: We also have an owner program and are testing new models. It’s much harder to work with individual owners, so we're much, much smaller there - but long tail is substantial. I believe that somewhere over 50% of vacation rental properties are self-managed. Which means there are five million plus self-managed properties out there and we need to figure out how to get to that audience. We're working on various strategies in the owners category but that's more long-term. I would say that for quite a while the focus will remain on property managers.

Is Google good or bad for RedAwning?

TC: I think Google is good for RedAwning. I do believe that the stories are true that the Google Hotel Ads product will eventually include vacation rentals. Since we are the single largest supplier of vacation rentals to everyone else, it makes sense that we would be part of that. I don't think anyone knows when that will happen. I'm not sure that Google knows exactly when that will happen. But we know the people in that category and we've been talking to them for some time so when the time is right our desire is to be a part of that.

Since we are the single largest supplier of vacation rentals to everyone else, it makes sense that we would be part of that.

TC: So yeah Google in the vacation rental space would be great for us, but that doesn't mean that individual owners will suddenly figure out how to connect themselves up to Google. I think Google poses a risk to the OTAs but what we do is we aggregate content. That's why we're large with all of the OTAs and that's why we would also be large for Google.  

How are you working with Amazon?

TC: It's somewhat known that we're a pretty close partner with Amazon. We’re one of the leading users of what they call Amazon Connect which is their phone automation system and of course our websites are on AWS just like everybody else’s. Our phones are currently answered by Scarlet [white label virtual assistant] she helps expedite our customers’ most common questions and actually deals with them directly. Amazon tried hotel marketing a couple years ago and they pulled back on that but if you think about Amazon Prime and its size, there I would be very surprised if they don't retry things in the space eventually. We try to have conversations with all of the big ten consumer brands about all those things so we would actually be a part of that when it happens. 

Amazon tried hotel marketing a couple years ago and they pulled back on that but if you think Amazon Prime and the size there I would be very surprised if they don’t retry things in the space eventually.

TC: I've had three calls in the last couple of weeks with Amazon. There's a whole lot of stuff that we're working on around these different areas. There will be some interesting things to come I don't think there will be any sudden move back into lodging because they already tried that, but I think eventually they will do something. I would watch the news not around distribution but some other interesting things that are going to come out and we're part of them so that's why we can't talk about them, but alluding to something that you already mentioned before, which is Amazon and its connection to homes. Since we are the single largest supplier we get to have a lot of interesting conversations some of these things may not come to pass but having the conversations is fun.


Access our Insights. Catch up on our recent analysis on Amazon's in-roads into the home sharing & services ecosystem.

 
 

The New Google Maps Will Redefine Tours & Activities This Summer

May 10th, 2018

Google is transforming Maps from a search tool into a local discovery tool. This summer’s new roll-outs will push it further down funnel into tours and activities bookings.
— Luke Bujarski

All of the recent clustered developments within the tours and activities space including Booking Holdings' acquisition of FareHarbor, TripAdvisor's acquisition of Bokun, and Marriott's tweaks to its Magic Moments program should be considered within the context of Google Maps.

The Maps feature is effectively becoming Google's default travel platform, as it continues to transform from a search tool into a local discovery tool. This will eventually give local tour operators and other businesses that target visitors a new way of funneling customers. It will also move Google further down the proverbial funnel by targeting users with personalized content and real-time recommendations based on what's trending.

We expect Google to eventually dissolve the Google Trips app - similar to what it did with Hotel Finder. Advertising on Google Maps is already a thing. Local businesses pay to stand out. Integrating all or some of the Google Trips (currently separate app) functionality will make Google Maps more attractive to visitors (non-locals) as they familiarize with locale pre-departure and in-destination. More non-local traffic will make Maps an interesting advertising platform for tour operators. Plumbing will be content and market-driven based on keyword and category search.

Google Maps is becoming an exploration platform.

The long string of impressive announcements at this week's I/O 2018 Google developer conference included new enhancements to its Maps product slated to roll out later this Summer. Google Maps was a key feature discussed. The platform is essentially transitioning from a search tool into a local discovery tool offering users recommendations on where to go and what to do based on real-time data of what's happening in a given city or neighborhood. 

 Jen Fitzpatrick VP Product & Engineering, Google presenting at I/O 2018

Jen Fitzpatrick VP Product & Engineering, Google presenting at I/O 2018

Here is an excerpt from a recent TechCrunch article explaining the features.  "So in the new Maps, you’ll find the new “For you” tab that’s basically a newsfeed-like experience with recommendations for you. You’ll be able to “follow” certain neighborhoods and cities (or maybe a place you plan to visit soon), similar to a social networking experience. When Google Maps finds interesting updates in that area — maybe a restaurant that’s trending or a new coffee shop that opens — it’ll tell you about that in your feed."

Canned vs dynamic content for activities.

We see two paradigms emerging when it comes to content and data for what the travel industry refers to as "tours and activities" and more recently "experiences". Canned content includes trail rides, food tours, and scheduled art lessons. We call it “canned” because while pricing and availability changes, the product remains consistent. Travel booking sites like Airbnb, Booking.com Expedia, and TripAdvisor are rushing to upload this content as bookable products. What customers have access to is also largely a function of how fast these suppliers can integrate canned content.

Dynamic content involves ephemeral activities based on what's trending at the time in a given area, particularly in urban settings. These include concerts, new restaurants, art exhibits, parades, marathons and more. This dynamic content is quickly becoming the domain of Google - through Maps.

Last year's NYC Pride March

Google Maps displayed the route with clever custom colors one day before the event making it easier for spectators, taxis, local businesses to plan.

We go every year. A wonderful way to celebrate equality and New York City.

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The level of data that Google can acquire on individuals, crowds and general flow and movement of people will give it the ability to personalize at scale. This will move Google further down the proverbial purchase funnel by giving local businesses the ability to target both locals and visitors in real-time.

Apple has fallen behind in this space and will struggle to catch up. Baidu, the Google of China, is doing the same thing with its map feature in China and globally. Users on Baidu Maps will receive different recommendations based on what's trending with that user base.

Baidu Map of New York City

Google Maps will have both.

For those travel consumer brands pursuing the tours and activities space, the question then becomes, can and will Google push further down into the canned experiences purchase funnel? Very likely and having both the canned and dynamic content will give Google an advantage over other travel apps. Travelers like to do both. Canned experiences are typically booked further in advance while dynamic experiences are part of the regular flow of the visitor experience. One platform that has access to both is more useful for the user. Time is a more precious commodity when traveling.

Travel is a life function. Google is a life platform. 

Travel as a function of human life boils down to navigating between two worlds: the familiar or local worlds and less familiar outside worlds. Travel companies are great at facilitating the transition between these two worlds in all manner of ways including the discovery, retrieval, and visualization of local information. Google is arguably the best at this process.  There are other companies that fall in this category that we at LUFT call "life platforms". 

Life Platforms.png

There are shopping apps and then there is Amazon. There are social media apps and then there is Facebook. There are smartphones and then there is Apple. There are job search sites and then there is LinkedIn. There are search engines and then there is Google. All of these companies have managed to dominate individual and basic life functions before moving into other areas. They now compete on many levels. There are others with great business models and loyal customers. Life platforms have the scale in terms of capital, users, content, technology and other compounding properties. Artificial intelligence is where many of these players overlap. AI also gives Google the ability to personalize recommendations on where to go and what to do.

Google Trips Will Eventually Fold Into Google Maps.

We saw it happen with Google Hotel Finder. Last year the company dissolved the stand-alone hotel booking app and integrated its accommodations search into the main Search and Maps applications. The same thing will likely happen with Trips. Promoting a new platform like Trips when Maps already has the same functionality and all of the traffic seems mismatched for an ad-driven platform like Google. Our sense is that Trips is essentially a test environment for Maps.


LUFT is a travel industry research & insights firm. Explore our Insights.

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