“I have seen a 75% drop in page views over last year.”
“I have a calendar that is WIDE OPEN. for the first time ever.”
“Has anyone else experienced such a low rental season?”
“My page views and inquiries are down 75% and 50% respectively over last year.”
“There has been a considerable drop in inquiries since it started at the tail end of last year.”
Both vacation rental managers and individual homeowners are reporting a significant drop in the number of inquiries and bookings coming from HomeAway causing many vacation rental suppliers to look for marketing alternatives.
In what can be considered a perfect storm, HomeAway inquiries have dropped for a number of reasons:
- HomeAway’s traffic has declined as a result of SEO issues.
- Google’s changes to AdWords have caused CPC to increase and impressions to decrease.
- HomeAway’s Best Match algorithm has resulted in the number of inquiries for many homes to decrease, at least short-term.
- The addition of Traveler Fees/Service Fees has caused prices to go up and demand to go down.
1. HomeAway’s SEO Issues
In the travel industry over the last two months, search engine marketers have reported that OTAs are seeing a jump in CPC (cost per click) and a downward trend in CTR (click through rate).
HomeAway, in particular, was aware that changes were coming to SEO that would negatively impact their traffic. In November of 2015, the Securities and Exchange Commission filing detailing Expedia’s then proposed purchase of HomeAway revealed an interesting statement regarding changes in search engine performance:
“On October 1, 2015, the HomeAway board of directors held a special telephonic meeting in which Mr. Sharples reported on a recent change in the search algorithms of a leading search engine and the potential for such a change to impact HomeAway’s business. The HomeAway board of directors discussed that this change would require an adjustment in anticipated marketing expense in management’s preliminary analysis of the subscription and transaction-based revenue model.”
As a result, HomeAway made a number of adjustments to the assumptions underlying their initial projections, including annual visits growth deceleration (due primarily to SEO reduction) in fiscal years 2016, 2017 and 2018.
Google’s recent algorithmic updates have been shown to negatively impact listing and directory sites while promoting local sites and content. However, HomeAway – in particular –saw an above average drop in traffic. When HomeAway announced that it expected to see a tick down in organic traffic, several marketers looked to the updates to see if changes would affect all vacation rental listing websites. As HomeAway’s organic traffic began to decline, speculation arose that HomeAway.com had been penalized by Google.
Conrad O’Connell, Digital Marketing Director at InterCoastal Net Designs (ICND), noticed changes with HomeAway’s ranking. “Searches in many of my clients’ main areas indicate that HomeAway has dropped out of the search results in lots of popular areas…For many vacation rental owners, marketers and managers, HomeAway dropping out of the Google search results would make a huge difference to their website traffic.”
O’Connell did some research to see what had impacted changes to HomeAway’s drop. “After doing some digging, I am pretty confident I have the answer,” said O’Connell. “HomeAway.com was not penalized by Google. Instead, the reason for the drop in many search results was something much more simple (and completely self-inflicted). HomeAway told Google to not crawl certain pages.”
O’Connell concluded, “Based on my sleuthing, HomeAway was using these links on tons of various internal linking structures throughout their website. As a result, their most popular pages (like to Deep Creek Lake, North Myrtle Beach and tons of others) are getting noindexed and blocked by Googlebot. It appears that HomeAway has since removed their robots.txt rules, but the recovery may be slow as search engine crawlers take a while to reindex results.”
2. Google’s AdWords Changes
SERP One, of Google’s more significant changes, is the new format for their SERP (Search Engine Results Page). To summarize, Google eliminated the right sidebar of ads and added a fourth position at the top for “highly commercial queries” (like hotels and vacation rentals), pushing organic results further down the page, and in most cases, below the fold. For organic search, it was quite a blow, but for OTA’s the impact on PPC was significant as well.
By changing the format of the SERP and eliminating the right column of ads, fewer positions will be displayed in the first page, resulting in skyrocketing CPC and lessened paid real estate on page 1.
In the end, fewer AdWords slots means the average CPC for the first page has increased and HomeAway is paying more for being on the first page, achieving less impressions and consequently less chances to achieve a conversion.
3. HomeAway’s Best Match Sort Algorithm
On October 29. 2015, just days before Expedia announced the purchase of HomeAway, HomeAway initiated a new sort algorithm called Best Match. Previously, search results were determined by subscription level followed by a listings’ quality score. The new system determines search position within a subscription level, placing the listings in front of a traveler that are most likely to result in a booking.
According to HomeAway, “Best match is a sophisticated process that looks at traveler preferences as well as the booking experience a listing provides to place listings within search results. Listings are first placed within their subscription level (as applicable) in search results and then sorted based on the best match for the traveler and their search to optimize bookings for property owners and managers. Best match is also used to determine the optimal placement of pay-per-booking listings throughout the search results.”
The goal of Best Match is to convert quickly. According to HomeAway COO Tom Hale, “It is true that conversion is critical to Best Match – within tiers (Platinum listings sort above Gold listings which sort above Silver, and so on). And it’s also true that if you do not have online booking enabled, or if you do not have alternate payment methods enabled, the system cannot know if your listing is converting or not. So you are well advised to make sure that the system can give you credit for conversions.”
Hale continued, “Our goal is to get bookings. Service fee enables Marketing spend. Marketing $$ enables more traffic. Best Match makes the conversion of that traffic on our site better.”
However, the Best Match system potentially drives traffic away from properties that already have a lot of bookings, properties that are not online bookable and properties that do not have a high percentage of “accepted bookings.” For homeowners and managers who steer bookings off of the site, Best Match will drop the home in search results.
According to Hale in a response to a homeowner, “Your bookings will come —- PROVIDED you have nights to sell AND provided we have good signals about your property in best match. If you are not taking bookings, and we can’t see your performance on the site, all bets are off. But assuming that you are working hard to succeed in best match, the algorithm will deliver you demand LATER in the year than you expect. But it will come.”
4. Addition of Traveler Fees/Service Fees
When HomeAway decided to mimic Airbnb’s pricing model by incorporating a Traveler Fee, HomeAway’s suppliers raced to forums and social media to express their discontent. As one owner said, “I had a significant drop in inquiries prior to the service fee – the service fee was just the nail in my vrbo coffin.”
The HomeAway Traveler/Service Fee tacks on an additional fee, paid by the traveler, to bookings made on the HomeAway family of sites. Below is a chart showing how traveler fees are calculated.
HomeAway CEO Brian Sharples explained, “The reality is that we’re re-investing the majority of this money into marketing to bring in more travelers (we nearly doubled marketing spend with the introduction of this fee) and to provide true financial guarantees that can protect and help travelers who have bad experiences from using our sites. And we’re also more than doubling our investment in government relations efforts to continue fighting for the rights of property owners all over the world.”
However, unlike the majority of Airbnb’s inventory, HomeAway’s inventory of second homes are typically listed on multiple channels, and pricing for each home is carefully set based on market conditions (i.e., supply, demand, seasonality, events, etc.).
The HomeAway Traveler/Service Fee ignores any pricing sensitivity in the marketplace. This fee burdens consumers with a five to nine percent increase in the cost of their vacation rental at a time that hotel and resort prices are becoming more competitive.
The number of bookings and inquiries from HomeAway will likely continue to decline if 1.) There is more price sensitivity in the market than HomeAway realized, or 2.) Consumers realize they can compare pricing and choose to book via another channel.
What is coming? Beware.
A few months ago, Booking.com announced to its hotel customers that it would stop providing the hotel with the guest’s email address as part of the booking confirmation process. Booking.com cited security as the key reason for the change.
In the hotel community, there is heavy speculation that the other OTAs will also decide to cease passing on guest email address. If their predictions are accurate, an Expedia-owned HomeAway is likely to follow suit.
HomeAway is now a nightmare. I’ll never renew again. Customer service is awful. They don’t know what they’re going and are nasty and rude. The corporate offioce is a bunch of arrogant millennials so you get no where. Don’t renew. Go elsewhere. They are useless. Inquiries way down. My place still not rented and I have them $500!
Best Match only works to the advantage of HA as they rank a property higher with more accepted bookings, meaning more fees going in their pockets. We as owners rent the same homes with the same guarantees of accuracy from our own websites. We own and rent many rentals in the Orlando area, specifically in Emerald Island Resort Kissimmee and we rent mostly from our website at https://www.emeraldislandrentals.com
Most customers know that they can get better deals by renting directly from the owners and not via OTAs.
Our site https://vacation.rentals is likewise seeing strong growth in new listings – especially from Colorado. Take a look at the huge numbers of listings we have now.
As we continue to grow into other markets (Florida, Texas, Hawaii, Costa Rica, and beyond we anticipate rising to the ranks of #4 in the market.
For homeowners and property managers who are exhausted with the high fees being charged to them, Vacation.Rentals is a great alternative to put a stop to it.
all the owners I know here on the West Coast of Fla are switch from VRBO
to HOME ESCAPE…………..ITS 199 a year and the rate won’t go up……book now
and you are locked in with that price for years……………
I quit VRBO and never looked back. Tired of the fees added every year.
i had less booking and views from Homeaway this year probably next year i will work just on Airbnb and Booking
I think HomeAway will eventually colapse and close business. All due to the Service fee. I experienced a 50-75% less bookings. I listed the properties with Booking.com, and now 90% of my bookings are comming from Booking.com. I hope amy others wake up and leave HomeAway.
I think that is unlikely. If you listen to the expedia quarterly conference call, they booked 39% more room nights on homeaway in the most recent quarter as compered to the previous year. Your bookings may be down, but homeaway is still growing after the iumplementation of the fees.
In the end it’s the homeowners who provide the service, so charging a ‘service fee’ [on top of listing subscription] and not providing it (thousands bad reviews from travelers ) is not fair. It’s always good to have an alternative. http://www.marthasvineyardrentals.org/
Human nature. Many scroll listings for hours like a fantasy looking for the Princes castle at rock bottom prices…..Trivago and related sites constantly push bargains, bargains cheap and cheap price, price, price…..the travel industry is about cheap, upgrades, bargains, bragging what a good deal you got at a five star castle. When economic turndown these fragile money grubbing sites will be gone and lazy property operators without alternative marketing will be BK almost immediately….it is coming. Listen to Old Queeg. Been through 3-4 of these adjustments….
It all makes sense now, the terrible quantity and quality of inquiries I have received in 2016. I called several times and followed up with emails as well…….heard nothing. And to top it off they are nasty too. Try to call any time of the day and expect hold time to start at 10 minutes. I held for over 30 minutes once.
Time to find a site that is more accommodating and honest to property owners. By end of 2016 property owners will have no control over their listing with inline bookings which will be mandatory.
I have advertised with Owners Direct ((part of Homeaway for last four years and originally the level od enquiries and bookings were very good but enquiries and bookings have now dried up. My cottage is in the wrong location and is very difficult to find, I have complained to Owners Direct but they don’t seem to understand or want to change.
Can anyone suggest another website to advertise on which does work
I was already getting about 40% of my bookings from Flipkey/Tripadvisor before things went crazy at HA/VRBO. Try them!
if you think Home Away’s customer service is bad, wait until you try Flip key/Trip Advisor!
I think there is no time to cry about the good old days of listing sites. The big ones declare vacation rental owners as assets. Funny thing that the asset has to pay to be used.
My father told me: “Never put all your eggs in one basket”. The solution for Homeaway assets will not be to search for another listing site but to think as an independent vacation rental owner and set up the own marketing and sales channels.
What they are doing is terrible, charging the homeowner more d more, giving lower placements charging renters an additional fee, really My rentals of two Hamptons vacation homes have gone from 100 booked last 9 years to 20 booked so far this year.
We have not raised prices and Hamptons is as hot as ever
I bought four listings on Homeaway last year, two platinum, global packages, and two regular. These listings cost many thousands of dollars, and have so far produced very little return on the investment. I am very disapointed with HomeAway, and will not be re-listing at the end of my contract.
If your wanting to book a condo in the panama city beach area, visit us on facebook…panama city beach rentals…no outrageous fees like vrbo..
over 300 condos available…. talk directly to the owner,ask questions—get quotes
Hi Joe, I’m trying to teach vacation rental owners how to shoot property videos with their cell phones. Here is a link to my training video with the process and pricing. https://www.youtube.com/watch?v=f6GUeMfQ0oo Is this something that would be beneficial for the Panama City Beach Rental group? Let me know what you think. -Mike (firstname.lastname@example.org)
Excellent appraisal and very informative.
Emails on BCOM dissappeared sometime ago and we agree, the next step is for others to follow. The traditional listing sites will suffer and volume asset managers, cannot really work via relays if correspondence is needed.
More problems on the horizon and interestingly some of our destnation sites have just popped back up the rankings. Maybe Google has relooked at its orginal mission statements