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Airbnb, Vrbo Go to Great — Sometimes Annoying Lengths — to Woo Hosts

July 17, 2021
A Top Secret Search for Galactic Gourds

(Bloomberg) — The phone at the Buckhorn Inn in Gatlinburg, Tennessee, has been ringing off the hook since the start of summer. Owner Lee Mellor tries to avoid answering it because her 10 rooms, seven cottages and three guest houses at the foot of the Smoky Mountains have been booked almost solid since April.

But that hasn’t stopped Airbnb Inc., Expedia Group Inc.’s Vrbo and other online travel agents from trying to woo her into listing the 30-acre property – with its sweeping views of the mountains, pet swans and private hiking trails – onto their sites.

The companies have doubled the number of calls to Mellor in the past year, but she has no interest in using the sites to book guests. The Inn has been operating mainly by word of mouth for decades and Mellor sees no reason to change.

After a dead summer last year while the coronavirus still had many places in lockdown, travel companies, and travelers, are making up for lost time. For many, the ideal trip is now domestic and rural, often within driving distance of home, and lodging in a private residence.  Almost 30 cents of every dollar spent in hospitality today is going toward short-term rentals, according to an analysis of data compiled from AirDNA and STR Inc. They were the fastest growing part of the online travel industry even before Covid-19, and over the past 18 months they’ve largely kept the sector afloat.

Short-term rental demand is up by more than 60% from a year ago and even more from pre-pandemic levels, said David Phillips, president of hospitality tech startup Jurny. That explosive demand means “booking platforms are feeling more pressure than ever to increase listings,” he said. Otherwise, they could miss out on one of the busiest summers ever and the potential for even more business throughout the year as people take advantage of remote-work flexibility. 

For hosts in Sevier County, Tennessee, home of the Dollywood theme park and the Great Smoky Mountains National Park, the increased rivalry is annoying. Brad Ivens, owner of cabin management company Eagles Ridge Resort, says he’s been getting more calls and more emails from more online travel companies than ever before. Even when he’s trying to relax in front of the TV, he can’t escape. “It feels like every other commercial is for Airbnb and Vrbo,” he said. Vern Hippensteal has trained his staff at the Hippensteal’s Mountain View Inn to say he’s not around when travel company representatives call. “Every day I delete emails — just delete — I don’t even open them,” he says.

The outreach campaigns aren’t just tied to the post-pandemic surge and a finite number of homes available. They also stem from what Airbnb’s rivals view as a rare moment of weakness for the travel titan. Airbnb has dominated the short-term rental market since it revolutionized travel 13 years ago by encouraging people to open their homes to strangers. Today, the San Francisco-based company has about 5.6 million listings around the world.

Airbnb has always prided itself on its relationship with the hosts who list their homes on its platform. Yet early in the pandemic the company alienated many by rolling out a full refund policy – a move that placated guests who were suddenly barred from travel, but cost some hosts tens of thousands of dollars. Then, after Airbnb laid off a quarter of its workforce in May, including many of its customer service representatives, hosts were sometimes left on hold for hours waiting to talk to someone at the company.

Expedia and Booking Holdings Inc. saw an opportunity and pounced. Ivan Feinseth, who covers online travel agents for Tigress Financial Partners, says the competition is “absolutely more aggressive now” than it’s ever been. In interviews with dozens of hosts in Sevier County, many seem to be agnostic about where they list their property.  Their strategies vary from relying solely on word of mouth to picking a favorite or listing on as many platforms as they can. But some have been converted.

Syresa and Lonnie Rowland started operating their historic farm house as a bed-and-breakfast on Airbnb a few years ago. During the pandemic, they decided to cross-list the property on Vrbo because they were frustrated at Airbnb’s Covid-19 cancellation policies. They say it was impossible to get someone from Airbnb on the phone, yet Vrbo has been calling them directly to offer advice on cleaning policies and safety features, like putting dead bolts on the bedroom doors. At their Historic Seaton Springs Farmhouse, every booking used to come via Airbnb. Now 50% come from Vrbo. 

In a recent advertisement, Vrbo directly targets Airbnb hosts, telling them if they list on Vrbo they’ll attract families “who spend over twice as much” on accommodations. (Some analysts dispute this.) Vrbo, which has about 2 million listings, has doubled the amount of money it spends on host acquisition efforts and launched its most expensive brand campaign ever.

“Our competitor is always in the press and always loud,” Jeff Hurst, Expedia Brands chief operating officer, said of Airbnb. “We wanted to be sure that at a moment when they are not acting on behalf of their partners that we were loud,” he said.

Vrbo and Booking have rolled out programs to help hosts copy information from their listing on Airbnb’s site, including their property description, amenities and photos, and transfer it to their platforms in less than 15 minutes. Every day Eric Bergaglia, Booking.com’s head of homes and apartments, is making calls from his Amsterdam-based office to court hosts in the U.S. with financial incentives, like commission-free bookings for first time users.

Earlier this year, Booking, which has 6.5 million listings, mainly in Europe, launched a pilot program offering its deepest discounts ever to hosts in some U.S. states. “We went deeper into the southeast states where we know most of the demand is going,” Bergaglia said.

In response to the increased competition, Airbnb unveiled its biggest platform upgrade ever in May, including more than 100 new product features. Guests were offered more flexibility with their bookings and the host onboarding process time was fast-tracked to just 10 minutes. The company also doubled the number of support agents available and created a new role: global head of hosting, in an attempt to help strengthen its relationship with hosts.

Since taking on the position, Catherine Powell says she has listened to more than 4,000 hosts to try and determine how the company can help them better. “We know that last summer when travel unexpectedly returned, we were not ready,” Powell said. Since then, the company has made many improvements.  “We are incredibly appreciative of our hosts sticking with us.”

Airbnb is also pushing more resources toward host recruitment efforts, Powell said. New hosts with just one listing who have joined since the pandemic was declared have earned $1.2 billion globally, she says. Chief Executive Officer Brian Chesky has said the company needs millions more hosts to keep up with a travel rebound that he predicts will be “unlike anything we have seen before.”

Sevier County has certainly experienced that. A day’s drive for two-thirds of the U.S. population east of the Mississippi River, the county was the fastest growing of the top 50 largest short-term rental markets in the U.S. for April, according to AirDNA data. Vacation rental managers in the area are pretty much fully booked until October and say they haven’t seen it like this since the 1990s.

Shirley Price, owner of the Foxtrot Bed and Breakfast in Gatlinburg, says she saw more people in the first four months of this year “than I’ve ever seen in the 16 years that we’ve been operating.” Jimbo Whaley, general manager of Hearthside Cabin Rentals in Pigeon Forge, says the deluge hit when the national park re-opened last May. “It was like it was on steroids,” Whaley said.

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