On these pages we often discuss new services, both for the specific vacation rental market and the larger online travel industry. Today, we’d like to highlight what’s been happening with Farecast.com.

Similar to Kayak.com, which we wrote about several months ago, Farecast is a “meta” search engine. Farecast provides “Smart Travel Search” by searching flight and hotel information from other online travel search engines and aggregating this information for consumers. Then comes the special sauce: by analyzing historical airfare and hotel rates over the prior 90 days and future trends, Farecast provides predictions on whether airfare prices will rise or fall or whether a quoted hotel rate is a deal or not.

Farecast also has a number of tools to help you plan the best times to travel, and presents the information in a clean, consumer-friendly format. Currently, predictive features for airfare is available for domestic travel between 75 airports. Hotel rate predictions, still in beta, are available for 30 US cities.

Through a partnership with MSN, Farecast has an integrated flight search module on the MSN Travel homepage. Data from Compete.com indicates that in September, MSN Travel was responsible for 10% of Farecast’s estimated 630,000 unique visitors for that month. The graphic below highlights Farecast’s continued popularity and surging monthly visitors.

With these predictive tools, Farecast increases consumer confidence and eliminates some of the guesswork in searching for the cheapest flight for your travel. This is incredibly valuable for converting online consumers from browsing to actual booking. And vacation rentals? Hmmm, sounds like just the industry that could benefit from an online service that increased consumer confidence!

Online video has become increasingly more prominent over the last few years, as evidenced by sites like YouTube and Hulu. As online video becomes even more popular, its role will expand into niche marketing purposes, such as the vacation rental market. According to a survey of over 2,900 people conducted by TNS research, three quarters of respondents said they watched more online video today than they did a year ago. Of that same 75%, half also said they expected to watch more online video in the coming year. Why are users watching video online?

Some of the reasons mentioned were:

• Convenience
• Relevance
• Control of Content

At FlipKey we are committed to “expanding the vacation rental market”, and we are keeping an eye on the potentially significant role of online video to aide the market’s expansion. One of the problems facing the industry today is attracting people who have never stayed in a vacation rental. A short concise online video outlining the services that a property manager provides could be a dynamic tool to help instill confidence in this group of people.

The TNS survey also highlighted that nearly two-thirds (63%) of people said they have taken some action after seeing an online video advertisement. Traditional TV advertising boasts nearly 80% of people taking some action after viewing an ad, but has been around much longer.

“Some Action” was defined as the following in online video’s case:

• Going to the companies website (44%)
• Searching for more information about a product (33%)
• Going to the brick and mortar store to look at a product (22%)
• Talking to friends and family about the product (21%)

Online video can serve as a tool for property managers to help the public learn more about their hospitality services and properties. FlipKey is interested and excited to see the impact that online video can have on the industry.

Unfortunately, this post comes 29 days after the article was published on USATODAY.com, but better late than never. Over the weekend I came across a nice, comprehensive article published by Gary Stoller of USA TODAY highlighting the growth potential of the vacation rental industry.

Titled, ‘Staying at a real home away from home’, the article provided one of the most thorough public reviews of the vacation rental industry and its growth potential.

Article Highlights:

• U.S. vacation rental market is estimated at $63B

• Vacation rental management companies expect to manage 12% more rental homes this year than in 2006, according to a survey of 129 companies by the Vacation Rental Managers Association.

• Rental inventory is growing because of a boom in vacation home sales, which have been largely unaffected by a downturn in the real estate business. Sales of vacation homes rose nearly 5% to a record 1.07 million last year, and 18% of buyers said they bought them to rent to others, according to an April survey by the National Association of Realtors.

• According to Steve Holmes, Wyndham Worldwide’s CEO, about one of five European vacationers rent a condo or house. Holmes estimates U.S. adoption rates with match that of Europe in “about a decade”.

Click here to read the full article.

FlipKey applauds the great coverage of the vacation rental industry by USA TODAY. With all the activity and recent publicity of the vacation rental industry, FlipKey sees 2008 as a cornerstone year for vacation rentals. Bring on the New Year!

We can all agree that Search is important in the vacation rental industry. Ask a property manager how they attract visitors to their site and ‘Search’ is likely the first word you’ll hear. As a result property managers are beginning to explore more creative ways to climb the Google rankings.

Earlier this week we were contacted by Best Coast Rentals of Port Aransas, Texas. In the interest of improving their search ranking, Best Coast Rentals wants to link to complimentary vacation rental sites - with the agreement that these same sites will link to Best Coast Rentals. This arrangement is referred to as a “link exchange”. Link exchanges are popular ways to boost “back links” - a key ingredient to Google’s Page Rank algorithm - however, link exchanges have their pitfalls.

Be Aware of BlackHats!!

As the market began to understand the importance of back links, so did the number of people attempting to “game” search engines by including all kinds of irrelevant links from other sites. Soon Google began to identify “link farms” - irrelevant sites linking to thousands of unrelated sites. This helped inflate the perceived popularity of participating sites within search engine rankings, but did not improve the relevance of Google’s search results. People attempting this strategy were label “black hats”.

Through the maturation of the Search industry, these techniques have been exposed and Search leaders, such as Google and Yahoo, developed techniques to effectively identify link farms and now ding participating websites effectively lowering their search ranking.

Why Best Coast Rentals is Legitimate

Best Coast Rentals link exchange program is not a black hat offer. Best Coast Rentals is only interested in linking to complimentary vacation rental sites and its Travel Links page not only links to participating websites, but also includes a blurb about the site. By including this additional content Best Coast Rentals maintains ‘relevancy’ - the golden word at Google.

FlipKey encourages Search collaboration within the vacation rental industry, but we advise participating companies to be careful to avoid Black Hat status. Focus on relevant and quality sites and you should be ok. If a participating site appears as a link farm, you will want to request that your website be removed from the site.

At FlipKey we like to frequently remind ourselves of the differences between hotels and vacation homes, and then think about how to leverage our industry’s uniqueness to promote vacation rentals. Today I’m going to talk about one of the larger differentiating factors between a hotel and a vacation home - the amenities.

When I book an average hotel room, I don’t need to think about the amenities I am getting because I already know exactly what to expect. A 25″ tv made in 1995, a phone, a coffee pot with those terrible coffee packets, tiny bottles of shampoo, etc. However, this is not true in the vacation rental industry. Amenities vary wildly amongst vacation homes, and they are an essential part of the selection process.

The “human touch” of vacation rental amenities is part of what makes vacation rentals so much better than hotels. However, this is also a large factor in making the selection process so difficult for many guests. The problem is two-fold:

1. Too many amenities to choose from makes it difficult to decide which are the most important.
2. Too little congruency amongst similar amenity descriptions found across multiple properties presents a real challenge when trying to compare apples to apples

Problem #1 is one of user choice. Only the individual guest can run the calculus that lets them decide whether they would rather have the smaller house with the Jacuzzi and the Grill, or opt for the larger house with the pool table and the Xbox 360. Problems of preference rarely have a universal solution.

Problem #2, however, is one that is solvable if the industry worked together to create a standard amenity taxonomy.

Allow me to illustrate the problem more clearly with an example:
Ben is taking his family to Disney World and is looking for a house in the Orlando area for his wife and 5 kids. One of the features that Ben wants to keep the family occupied at night is a nice home theater room. He wants surround sound, a 50″+ plasma television, and plenty of comfortable seating. However, upon sifting through the endless pages of available vacation rentals in the Orlando area, Ben sees property listings that use all sorts of different terms to describe what may (or may not) be a home theater system:

• DVD
• DVD/TV
• HDTV
• Color TV
• Cable TV
• LCD
• Surround System
• And many more variations

Ben quickly notices that he has no way to tell which properties actually have a home theater room. Does the listing with “HDTV” even have a DVD player? Is the “Home Theater System” in High Definition? This problem is not unique to Ben’s situation. Ambiguity reigns in the amenity listings for most properties found online.

What this mostly comes down to is the larger industry-wide issue regarding the lack of standardization. It’s something we have thought about a lot at FlipKey, and an issue that we would like to see solved one day.

For the average property manager, a guest booking a vacation home represents the end of the sales process. Congratulations! But for the average guest, the booking of their vacation home is just the beginning of their vacation planning. Next comes the flight, the rental car, the tickets, and all the other essential itinerary planning.

Enter Kayak.com. Kayak represents everything that is great about the internet - it’s quick, it’s comprehensive, and it is pretty much guaranteed to give you what you want. Kayak is different than Expedia and Orbitz. Kayak is what is called a “meta” search engine. Kayak’s charge is to search all other travel search engines to help the consumer find the best option. As such, the Kayak search engine covers more ground than all the other travel sites out there. Thus you are almost always assured of finding the cheapest flight.

Kayak is a great service to help your guests book the rest of their trip. Luckily, Kayak provides some simple tools that can allow you to extend its service to your own website. By simply copying and pasting some simple html into your site you can help your guests find a cheap flight and car rental service.

For one example:

Embedding a widget like this on your web site makes it very simple for your guest to begin their flight search. It costs nothing to add to your site and can help compliment your primary service (providing great lodging accommodations).

Since most vacation home sites are regional, you can even pre-populate Kayak’s tools with the airport nearest your vacation homes. Kayak offers several simple widgets you can embed on your website. Click here to see more options.

In addition to helping your guests, you can earn money by signing up for an affiliate id via linkshare. By inserting the id into the widget on your site, you can ensure you earn a commission on anybody you send to Kayak.

Your guests look to you as an expert. By providing them with easy access to the best-in-class tools on the internet, you are setting high standards that will keep guests coming back to you every year.

FlipKey was born out of my own experience as a vacation home owner/renter. For the last year I have rented out my Boston condo to people from around the globe. When friends hear of my little side business they are quick with questions:

• Has anyone trashed your place?
• What happens if there is a problem?
• How can you trust a complete stranger?
• Has anyone tried to scam you?

It’s human nature to focus on the negative, but I’m happy to say that my experiences have been 100% positive. I have met people from all around the world that wanted to taste Boston - all have been respectful - and in some cases I have made life long friends.

Moira L.: A wonderful woman from Australia who was in town for four weeks to promote her personal care product line. She called once a week with a general question about the home and then took me out for coffee to say thank you. Moira left my home in better shape than the day I moved in.

Dolores G.: In town for a week to help her daughter find an apartment. I needed to pick up my bike in storage and met them in my home. Dolores had a wonderful family that left behind a bottle of wine to thank me for a great experience.

Elizabeth D.: Arrived in Boston during a cold and rainy Spring week. I was in San Francisco during her family’s stay. Unfortunately my furnace broke down and the family was stuck in my 40 degree condo for 24 hours while I arranged a contractor to replace the broken unit. Elizabeth helped me coordinate letting the contractors in and stayed in good spirits throughout the ordeal. I refunded their last two nights.

The people who have stayed with me have been great, but problems do arise - a broken furnace here and a lost key there. I am fortunate enough to live within 10 minutes of my vacation condo, but my experiences have highlighted the necessity for ‘assistance’. Although occasional rentals can be managed directly by the owner, a seamless experience can only occur if a dedicated service/individual is available for the various mishaps that can occur during a vacation rental.

As renters we have a responsibility to ensure a great vacation experience for our guests. Bad guests do exist, but they are few and far between. Below are my recommendations for ensuring guests receive the support they deserve:

• Use a property manager. Although property managers will charge a 15-30% service fee on the total room rate, they provide end-to-end services that will remove the back breaking chores of cleaning & maintenance and will take care of onsite problems. You get what you pay for, and more importantly your guests will get what they paid for.
• If you are independently renting your home make sure you have a trusted contact within 15 minutes of the home. Your ‘back-up’ should have key access and be aware of when guests are in the home. Should a problem arise your back-up should have previously agreed to manage the situation.
• Before a guest arrives provide them an emergency contact and explain your process in the case of an unfortunate event. If you are a property manager this is a key communication to emphasize the reputation of your service and advantages of using a professional management service.

It’s the week before Labor Day and summer is coming to a close. What do you do if you’re a property manager looking at a calendar of unbooked vacation rental units for the next month?

• Slashing prices might bring in last minute renters. This is a popular choice among vacation rental property managers, with last minute discounts ranging from 10-20%.
• Offer free or discounted activities through local services and area attractions.
• Sweepstakes and raffle incentives.

Below we’ve included sample booking incentives that we’ve noticed, some of which are more appealing than others.

Twiddy (Outer Banks, NC): Rent for a Week and Receive a Free Jeep Rental ($800 value)

DeepCreek (Mt. Railey, MD): 20% Discount on Rental Price and Free High Speed Internet

LoonRes (Lincoln, NH): Stay a Week and Receive a Free Tank of Gas

SunRealtyNc (Outer Banks, NC): Free Fishing for 8 with Home Rental

GrandbyVacationHomes (Grandby, CO): Golf for 4 and Rafting for 8 with Week Long Vacation Rental

MountainChalets (Gatlinburg, TN): Book a Cabin - Win a Jeep (1 in 15,000 chance of winning)

FloridaSpiritVacationHome (Orlando, FL): Six Night Stay, Receive $50 Gas and $75 Grocery Coupons

If you have others to add to the list, please send them in via comments to this post.

Google Trends (trends.google.com) is a fun and useful way to keep tabs on the search volume of just about anything. Enter a term into the search box and see a graph of the term’s search volume since 2004. The real value comes when you compare two or more terms in the same graph - this provides a great view into the relative popularity of the requested terms.

The ubiquitous example in Boston is “red sox, yankees” - as you can see the two graph lines hold very close except in October 2004 when the Sox won the World Series.

However, this site is about vacation rentals, so we will spare you from our obsession of Red Sox nation.

What is more popular, vacation homes or vacation condos?

Google Trends: “vacation rental” vs “vacation home” vs “vacation condo”

As you can see, “vacation home” outpaces “vacation condo” by an approximately 2-1 margin. The generic “vacation rental” term makes a good baseline to compare the relative popularity of “vacation home” and “vacation condo”.

What popular vacation destination is the most searched for?

Google Trends: “outer banks” vs “cape cod” vs “lake tahoe” vs “vail” vs “myrtle beach”

A bit of an upset here - I would not have guessed “outer banks” to come in dead last. Myrtle takes the crown with the Cape coming in a close second.

While all of the above data is perfectly valid, it doesn’t give you much more than a crude directional metric. We suggest you use Google Trends as a fun exploratory tool, but avoid using it for anything beyond “oh, that’s interesting” based analysis.

For the international crowd, renting a vacation property for your “holiday” has been a popular alternative to hotel and resort accommodations for decades. Over the last several years this trend has been spreading across the Atlantic and represents a growing segment of the US travel market.

And it’s not just families trekking for a weeklong vacation at a home rental on the coast. Here at FlipKey we have experienced first hand the growth of urban vacation rentals and the increase in travelers seeking alternative lodging in places not usually associated with vacation rental travel. Our personal rental units here in Boston are fully booked and have been since the Spring.

Maybe you’re planning a trip to Vegas? Why stay on the Strip? OK, we can think of a few reasons - but the rationale of the vacation rental holds true even in the hot desert sun: affordability, unique accommodations with more space, and the opportunity to escape the madness of the hotels and retreat to your own temporary oasis and private pool. Las Vegas Retreats - Castillo Estaban.

As vacation rentals become more popular, we expect inventory to continue to grow in all vacation destinations, not simply beach, mountain and golf locations.