The fee structure in vacation rentals is likely to shift more towards to suppliers rather than guests over time, Expedia Group predicts.
The company, owner of rental giant HomeAway, was reacting to recent tests at Airbnb to eliminate the fee incurred by the traveler for staying at a property.
Responding to a question from analysts during the Expedia Group Q1 2018 earnings call, CEO and president Mark Okerstrom says HomeAway has operated a hybrid model (owner fees and guest fees) for some time and believes having a combination of the two puts it in a "great position" to flexibility.
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Still, he argues that in the near-term, a hybrid approach will remain, yet this is likely to change as the overlap of properties on different platforms increases - a likely scenario as Expedia Group and its rival Booking.com continue to ramp up their private accommodation supply in the three-way battle with Airbnb.
He adds: "I expect that the monetization will shift a little bit more to supplier pays and away from traveler pays based on what we've seen in other industries."
In the same vein, chief financial officer Alan Pickerill says there is a gradual move of the business over to "pay-per-booking," shifting away from the traditional subscription fee that was favored by HomeAway pre-acquisition.
The company is in "mid-innings" in that evolution, he says, with some degree of "headwind" as a result.
He adds: "Now it shifted from being both a volume and rate headwind to being essentially just a volume headwind and I think once we kind of fully normalize the subscription side of that business then the take rate can start to normalize."
One rental brand to rule them all?
Meanwhile, Okerstrom says there is a some "degree of complexity operationally" with having two vacation rental brands in HomeAway and VRBO in the US.
Despite this, he believes each brand has a loyal customer following so marketing spend and treatment of both is handled carefully.
Having two brands is a disadvantage, he concedes, but claims it is not having a detrimental impact on being able to grow its overall vacation rental business and is unlikely to "hold us back."
He adds: "But certainly if we were able to concentrate all of our marketing dollars and all of the customer and supplier-side loyalty in one brand, it would be a simplifier in our life, and I think could be a benefit."