The Blog

Foregetaway – The Weather Channels (TWC) vacation rental marketing arm - recently announced a multi – year deal (no financial terms disclosed) making AirTran the official airline of ForGetaway.com.

The deal ensures that AirTran will have a featured link on every page of TWC’s listing service for the next seven years. This is an interesting deal, as it marks the first exclusive airline partnership in the vacation rental market.

AirTran operates scheduled airline service primarily in short-haul markets in the eastern U.S. Below is a snapshot of AirTran (ticker AAI on the far left) and its competitors, as determined by Yahoo finance. Illustrated below, AirTran is a smaller player compared to larger operators, such as JetBlue, Delta and SouthWest.

Despite its size, AirTran does offer service to several key vacation rental destinations, such as, Florida, Colorado, North Carolina, Massachusetts (Cape Cod) and South Carolina. Key markets AirTran does not currently service include Myrtle Beach (SC), Hawaii, the Caribbean and Europe.

The deal continues the exploration of new revenue categories that are emerging in the vacation rental marketing arena. FlipKey recently reported on HomeAway’s introduction of display advertising across its network of sites. TWC’s partnership with AirTran is the first dedicated airline partnership - a logical extension of its service, complimenting vacation rental interest with relevant content and offers. With the emergence of more sophisticated vacation rental properties we won’t be surprised to see similar deals announced in 2008.

What’s that? Oh, the phone is ringing… I wonder if it’s Delta! : )

Over the last year I have been “cold called” by three different new vacation rental listing services (that will remain nameless). Here is the basic run down of my conversations when fielding these calls.

Caller (clearly reading off a script): Hello, can I speak to the rental manager

Me: Speaking

Caller: I’m calling on behalf of (website name) and we would like to offer you an introductory rate of $99. Our website features all the latest internet technologies and is considerably cheaper compared to the current marketing services you are using.

Me: How did you get my number?

Caller: You are on my contact list

Me: How did I get on your contact list?

Caller: (silence)

Me: I think we are done here

Don’t get me wrong, a component of growing a new business is selling and you have to sell to somebody, but there are rules of engagement. The only service where I listed my number is a third party website. In other words, I am a small operator and therefore I don’t have my own website and only use third party sites like VRBO. The contact information I put on these sites is solely intended for the use of my prospective guests.

By calling me, these new companies are telling me, “I took your information from a competitive service and I’m now using it to get you to use our service”. First, this is a clear violation of the Terms of Service of the sites I use to market properties. Secondly, it annoys me because the caller simply pushes their service without taking the time to understand if I have any problems that need to be solved. “A nicer looking / cheaper VRBO” is not a helpful pitch – putting people into my homes at a higher nightly rates is.

Yesterday, Mountain Reservations Inc. announced the acquisition of VRGateway Inc., bringing VRGateway’s newly re-launched consumer site www.rooster.com into the Mountain Reservations stable of “over 80 web sites that offer consumers . . . vacation properties for short and long-term rental.”

Both of these companies have re-branded themselves in the past and plan to announce a new consumer brand in the future. Mountain Reservations was formerly OTravel (known as Ski West Inc. before that) until Overstock.com sold it to a private equity firm for $17M in April 2007. VRGateway’s consumer destination site used to be vrgateway.com until roughly October 2007 when it was re-branded as rooster.com. According to yesterday’s press release consumers can expect a new brand name and destination website from the combined entity in the second quarter of 2008.

Mountain Reservations has been successful developing a niche alpine rentals service, with growing consumer traffic and a robust inventory of 9,556 rental listings in popular mountain destinations on www.mtnres.com. VRGateway’s attempt to build a national consumer brand has been challenging, attracting less traffic nationally then mtnres.com and including only 7,055 national listings through their destination search interface.

With this acquisition, Mountain Reservations is hoping to bridge its niche market success to a broader market offering. The new combined entity is dedicated to working only with properties represented by property managers and through channel partners which will limit their market to North America.

The acquisition of VRGateway by Mountain Reservations demonstrates the challenges VRGateway has faced in creating a viable consumer brand. The fact remains: there is no recognized consumer brand in the vacation rental market. In hindsight, Mountain Reservations has proven that focusing on a niche sub-segment of the market is a viable and successful market entry point.

As a new developer at FlipKey and a new member to this industry, I am excited to report on my first experience staying in a vacation rental. My friend and I spent the New Years holiday near Steamboat Mountain in Colorado on a snowboarding trip.

The trip was last minute, and as such we rolled into Vail without any reservations. However, we were lucky enough to find The Summit Resort Group had a two bedroom condo available in Dillon, CO. It was perfect! It ended up being more affordable and substantially more comfortable than if we had rented a pair of hotel rooms.

I was amazed at just how smooth the process was. Making the reservation, picking up the keys and an information packet at an after hours lock box, and finally finding the complex was a seamless process. The only trouble we did run into was finding the right condo unit and with one quick call to the 24 hour help number provided in the packet we were quickly in our vacation rental.

We enjoyed our very own kitchen, cooked our own dinner, washed and dried our snowboard clothes with the in-unit washer and dryer, and each had our own comfortable bedroom to sleep in. Although the weather attempted to wreak havoc on our vacation thereby adding unneeded stress, being able to relax in our very own vacation rental after a great day of snowboarding was exactly what we all needed. (click here to check out where we stayed)

The entire experience was much more personable than a hotel and the management company genuinely wanted to help our group enjoy our trip in Colorado. Count me as another satisfied vacation rental customer!

HomeAway has created a bit of a buzz in the industry with their recent decision to start including banner advertisements on their Web properties (vrbo.com, vacationrentals.com, et al). The decision has left a sour taste in the mouth of many rent-by-owners, as evidenced in various online forums.

While it is widely accepted by most Internet consumers that advertisements are par for the course on “free” Web sites, there has always been a much larger debate about advertisements on “paid” sites.

Comment left by a HomeAway Subscriber:

“I guess it was inevitable. Banner ads have started appearing on all the HomeAway sites (including VRBO and Vacation Rentals. com). So far,I’ve encountered ads for Verizon, Apple, and Nationwide Insurance.

On the plus side, by giving HomeAway another revenue stream, it may help to forestall a price increase for those of us who list our properties on these sites. I just hope they keep the ads to a reasonable number. They are sure to be a distraction and will often lead prospective renters away from our vacation-rental listings and off to buy phones, computers, and other products.”

To date, HomeAway has slowly rolled out its display ads and has limited the displays to select pages. The only real risk to the introduction of display ads, as highlighted in the comment above, is the potential adverse effect on inquiry rates. I’m sure HomeAway will be keeping an eye on this – as will their subscribers.

Most major airlines and online travel agents (e.g. Orbitz, Expedia) are now offering travel insurance before you complete your vacation plans. For years I have seen these offers, but never found myself compelled to purchase a policy.

A few weeks ago I purchased a “too good to be true” flight from Spirit Airlines and suddenly I found myself in need of added security. Spirit was offering round trip airfares for $0.99. (Note: That’s 99 cents – not dollars). I was skeptical of the offer and wanted to avoid being stranded should my flight be canceled, so I purchased a travel insurance policy from AIG Travel Guard.

As luck would have it, I was forced to cancel my travel plans with Spirit Airlines. Although my ticket only cost me a $1, I wanted to test out the range of my insurance policy. “Would my $15 insurance policy cover my $1 flight”?

Summary of my call with AIG:

Nay on the refund. AIG would have refunded the ticket if my change in travel plans were due to a death or some type of disaster. Covered claims usually involve canceled flights or extreme delays (due to weather or maintenance).

In the event you do qualify for a claim you must provide evidence of your flight and the conditions that caused your inconvenience

• If a flight is canceled you must get the airline to write a note confirming the conditions that lead to the cancellation.
• If you have a sudden emergency (typically health related) and need to cut your trip short, the insurance company will require medical documents

The general theme is that you need third party documents to successfully submit a travel insurance claim. Obviously AIG can’t just hand out claims, but I have to imagine the last thing the airline wants to do – with 200 screaming passengers looking for a new flight - is to write you a note confirming they have stranded you. This is the catch of any type of travel insurance – everyone needs proof of your inconvenience. We recently wrote about new vacation rental policies that offer protection from falsely advertised homes, but these policies also come with fine print that require proactive leg work on the consumer’s side.

Insurance helps us feel secure with our travel plans, but should you ever purchase a travel insurance policy remember to be proactive. If any thing goes wrong ask for documentation, take pictures and collect contact numbers in case additional follow-up is necessary.

Launched in June of 2007, the FlipKey Blog has covered vacation rental topics ranging from keyless entry to open calendar standards to exclusive industry interviews. To celebrate the New Year we wanted to take a look back to determine the most popular articles from last year.  Top posts were determined by page views of individual articles.

FlipKey’s Top 10 Vacation Rental Blog Posts (2007)

10.Calendars Want to be Free - Rentors.org Falls Short

9. Rentability.com - Taking the Pay Per Inquiry Model To Europe

8. Keyless Entry – The Pros and The Cons

7. FlipKey Guest Interview - A Conversation with Rick Fisher of Vacation Home Expos

6. Weather Channel Stepping up its Vacation Rental Efforts – Acquires LakeRentals.com

5. Guarantees: Should Guests Wonder if their Vacation Rental Home Exists?

4. PickPackGo Launches New Listing Service – How My Home Listing Got Poached

3. Meet LiveRez – The Secret Sauce Behind All Star Vacation Homes Success

2. The Winners Circle in the FlipKey Travel Blog Challenge

1. UPDATE: PickPackGo Launches Service - HomeAway Launches Lawsuit

Typically we pick topics for the FlipKey blog based on things we think are important and relevant to the vacation rental industry. This isn’t necessarily one of those times.

Earlier in the week a friend sent me a photo of the top pictures on National Geographic in ’07. The following pic caught my eye (and luckily not my hand).

The bad news: This is a real photo.
The good news: They were able to recover the hand and successfully re-attach it to the original owner (not joking).

Ultimately the photo reminded me of the misconceptions between alligators and crocodiles. Florida represents one of the largest vacation rental markets in the world and is also one of the only geographies were both alligators and crocodiles exist.

Typically, when I return from my Florida travels friends and family often ask me if I had any crocodile run-ins. Before I answer “no”, I take the time to explain that Florida’s population of alligators far out numbers the population of crocs. In addition, Florida is only home to saltwater crocodiles which are significantly less aggressive than freshwater crocs found in Africa and Australia. The above picture is of a “Nile Crocodile” in Africa – you will not find this type of croc in Florida.

Alligators are not particularly aggressive creatures. Between 1948 to 2005 there were only 17 recorded “deaths by alligator”. That’s about 0.3 deaths per year. Comparatively, crocodiles have been responsible for 51 recorded deaths between 1990-1994. That’s nearly 13 deaths per year – nearly all of them occurring outside of the U.S. In fact, I could not find a recorded ‘death by crocodile’ in the United States.

Taken from Yahoo Answers, here is a breakdown of additional differences between alligators and crocs:

• You can’t see an alligator’s teeth when it’s mouth is closed; its lower teeth fit snugly into pits in the upper jaw. In contrast, a crocodile’s lower teeth are always visible.
• Alligators have a broad snout, while crocodiles have a thinner snout
• Alligators tend to be grayish black in color, whereas crocodiles have a light tan appearance.
• Alligators can only be found in the southeastern United States and in some parts of China. Crocodiles can be found all over the world.
• In the wild, alligators tend to run away. While not exactly wallflowers, they certainly prefer their own company. Some species of crocodiles, on the other hand, have legendary tempers.

In July we wrote about Rentors.org and its close relationship with HomeAway. Originally created to provide a universal calendar solution for the vacation rental market, Rentors.org is now fully owned and operated by HomeAway. HomeAway purchased Rentors.org many moons ago; however, the service continued operating under the Rentors.org brand until Dec ’07.

For the many users of Rentors.org you will now be redirected to homeawayconnect.com. Don’t be alarmed – all your information will still be there. The biggest difference is that Rentors.org is now more upfront about which listing sites they work with. In short, they work exclusively with HomeAway properties.

The image below is taken directly from the homepage of HomeAwayConnect.com.

The implications of using HomeAwayConnect (HAC) as your primary calendar system:

1. It allows you to centralize your calendars for up to 99 properties in one location. By updating your calendar on HAC your calendars will be automatically updated across all HomeAway properties you list on.
2. HAC only works with HomeAway properties. This means if you would like to import your calendar to another service HAC will not allow the calendar to be embedded on the site.
3. If you discontinue using HAC you will no longer have access to any information saved on the service.

HomeAway has an incentive to control calendar data, so we don’t blame them for their closed approach, but it’s not an optimal policy to promote more effective marketing in the vacation rental space.

Ideally the industry would have access to a central and open calendar system that allows managers to input availability once and allow it to appear on any site of their choosing. The iCal protocol has delivered tremendous value in allowing thousands of general calendar systems to share data. Will a similar solution present itself in ’08 for the vacation rental industry?

The Weather Channel (TWC) entered the vacation rental market last year in hopes of leveraging its traffic and SEO assets to carve out a viable competitor to HomeAway. Today TechCrunch reported that TWC is putting itself up for sale for an estimated $5 billion.

The merits of the $5B price tag are open for discussion, but the bigger question from the FlipKey staff is, “what does this mean for TWC’s vacation rental efforts?”

1. TWC’s vacation rental sites ForGetaway.com and Lakerentals.com are second tier sites compared to the much larger HomeAway. It’s likely that TWC identified the vacation rental listing market as an easy, buy vs. build, entry to diversify its business. After a year of operation TWC’s VR properties have seen two fold traffic increases, but continue to be light years away from surpassing HomeAway. Like so many others, TWC likely under estimated the difficulty of creating a dominate vacation rental service (see vrgateway.com, vacationspot.com, etc.)
2. TWC’s primary assets are Weather.com and its original cable weather channel. It’s entry into the VR market was a “nice to have” to illustrate the additional market categories TWC has access to with its viewer / visitor base.
3. The majority of TWC’s listings have been acquired by partnering with existing services. Few people are independently signing up with TWC to market their vacation homes.
4. The VR market is far from a core competency of TWC. It’s likely that the VR offerings from TWC are “illustrative assets” of market opportunities as it attempts to sell itself.

We would be surprised to see anything truly innovative in the VR space this year from TWC. TWC has much bigger fish to fry if it is going to command a $5B price tag. The likely purchaser of TWC is NBC and it’s hard to imagine NBC wanting to invest and grow a VR business.

We invite any reps from TWC to leave a post on this blog to explain the future of ForGetAway and Lakehomes in the wake of a sale of TWC.