So I’m taking credit for this, even though it’s totally not true. Yesterday HomeAway introduced performance based listings, also known as Pay Per Booking. An owner pays nothing up front and only pays a small fee when and if they get a booking. Here’s how that came about.
A little over a year ago I sat down with Jon Gray, HomeAway’s Senior Vice President for North America, to share my latest brilliant idea. In my home town we have three major festivals per year which overwhelm the capacity of our local hotels. Wouldn’t it be great, I said, if HomeAway introduced a “festival listing” which would cost nothing up front and would allow occasional renters to take advantage of heightened temporary demand. Since HomeAway already had online payments they could tie these ‘festival listings’ to the new service and... voila! A new market of renters who otherwise might not pay for a full subscription. Jon’s face went pale and he immediately stood up. With a somewhat stunned tone in his voice he said “Joel, that’s just... absolutely brilliant! I’m going to redirect all of our resources towards this breakthrough idea of yours!” And HomeAway then spent the next year making it happen.
Well, no. Not really. Actually he said, “yeah, we’re already working towards that. The challenge is that we can’t do something for just one market since we’re a global company, so we have to roll it out world wide. We're going to call it Pay Per Booking and we think it will probably release in the fourth quarter of 2013”.
But still, a great idea, yes? And in fact, it is. Other players in this space have also introduced pay per booking options, and of course some have built their business model around it. But what I appreciate about HomeAway’s approach is that they’ve paid close attention to their core customers and made sure that they’re clearly differentiating their offerings. At both the 2013 Owner’s Summit and RezFest, Brian Sharples stated unequivocally that pay per booking is an option for an underserved market, and not the direction that the will be pushing all users. “If you’re in this business seriously, there’s no better value than a subscription listing, and we’re going to keep it that way”. For some, Pay Per Booking will be a great introduction to the world of vacation rentals, and it will be all they ever need. For others it will be the starter program that introduces them to new income and a new lifestyle.
Currently more than seventy percent of vacation homes in the US are used solely by their owner, and sit idle for more than forty seven weeks per year. Don’t you want access to some of those amazing properties? And wouldn’t those owners benefit greatly from income that would, more than half of the time, cover more than three quarters of their mortgage?
More than once I’ve been called a cheerleader for vacation rentals, and that’s ridiculous because I look terrible in lycra. But I am a fan of where this industry is headed. What do you think about Pay Per Booking? Sound off in the comments below.
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