TripAdvisor is quiet about its vacation rental businesses, at least relative to the noise its competitors like HomeAway and Airbnb make about their own services-- and compared with how much the Massachusetts-based company talks about its other projects, like instant booking for hotels.
Yet last year TripAdvisor grew its vacation rental listings 18%, to 770,000, it revealed in its annual report.
It makes listings available primarily on FlipKey, its largest brand (with more than 300,000 listings). It also runs HolidayLettings.co.uk, Niumba.com, TripAdvisor Vacation Rentals, and Vacation Home Rentals.
Despite the growth, TripAdvisor faces a few challenges with vacation rentals.
For one, Expedia plans to step up HomeAway’s marketing within the next three years, to outgun and outmaneuver Airbnb. Booking.com has also dived into vacation rentals, and hotel chains, like Accor, Choice, and Hyatt, are experimenting with it, too.
TripAdvisor also faces a challenge as other reservation services focused on vacation and short-term rental properties adjust their business models.
TripAdvisor's services use either a subscription-based fee structure or a free-to-list, commission-per-booking-based option. Its monetization is estimated to be at about 12%, comparable with Airbnb's level.
The company generated more than 65% of its vacation rentals revenue from free-to-list in 2015.
In comparison, HomeAway has been re-jiggering its revenue offerings to identify the optimum ones. In Australia, Expedia's Stayz last month adjusted its commission to 10% of the booking, replacing its old plan of $164(AUS) a year and $15.90(AUS) a night.
Another question is how TripAdvisor will maintain its growth rate in listings. One option would be to grow through the acquisition of brands in markets it is relatively weak in. Possible targets include Aura (an Australian site that has reported strong growth), or 9Flats (which has experimented with pricing models) or Wimdu in Europe.
Other possible players are At Home Abroad, HouseTrip (which has had a dramatic time recently), OnlineVacationRentals.com, Rentalo, Roomorama (lightly funded), and Villas International.
Earlier:
Choice Hotels opens a vacation rental platform to (kind of) compete with AirbnbHow Expedia will help HomeAway battle Airbnb