Online Vacation Rentals Market Goes Gangbusters

[José Balido]

by José Balido

With an assist from straightened economic times (from both the supply and demand side), vacation rentals -- aka holiday rentals, as our Commonwealth cousins put it -- have been booming even more than when I last talked 'em up on this blog a year ago. New agencies -- especially Internet-based -- proliferate even as we see pushback from some local governments, recently including Paris, Maui, and New York State, the last of which in July approved a law banning rentals of less than 30 days unless the owner remains in the home while the renter is in residence.

Dwelling betwixt locals in your own cozy apartment in SoMa, overlooking a vineyard, or on Copacabana beach is certainly a swell way to experience San Francisco, Tuscany, and Rio, among other popular spots. And until not all that long ago, it was a fairly hit-or-miss proposition. Especially since the turn of the century, though, you now have your pick of hundreds of locally-based or international sites that can set you up in just about any kind of digs you desire -- rooms, apartments, bungalows, mansions, houseboats -- and at price points from less than US$50 a night to seemingly infinity and beyond. These Web outfits operate on varying principles, but basically break down into three models: the classified-ad clearinghouse, the quasi-social network, and the direct-booking site.

Top Vacation Rental Companies

An excellent example of the last, just two years old, is HouseTrip.com, which I discovered at World Travel Mart in London last November. Based in Switzerland, at the moment it specializes mostly in holiday apartments in Paris, London, Rome, Barcelona, Amsterdam, and other large, tourist-popular European cities, but it also has scattered listings in various other destinations. A similar service is two-year-old Roomorama.com, with various Euro locations, a number of North and South American cities, and a handful of destinations across the rest of the world. Rentals are booked and processed through these sites directly, and they take care of most of the administrative details themselves.

Far more common out there are the clearinghouses, which list owners' properties and sends guests to deal directly with the owners. Here the biggest players are Texas-based HomeAway.com, with nearly a quarter million paid listings in some 120 countries (this company also owns some of the industry's other biggest sites, such as VRBO.com and Holiday-Rentals.co.uk) and Flipkey.com, with more than 100,000 listings in 21 countries (owned by TripAdvisor, though it covers fewer countries, FlipKey has the considerable leg-up of getting its properties listed on one of the world's most popular travel sites).

These types of networks were pioneered 11 years ago by Couchsurfing.com, whose two million members now offer places to crash for free in 238 countries. Others have sprung up more recently that list not freebies but cheapies, including AirBnB.com (four years old, more than 5,300 cities, dubbed "the eBay of space") and Crashpadder.com (two years old, 900 cities).

All the above sites pretty much get you to the same place -- your own home away from home -- but their level of involvement can make something of a difference if something goes wrong. For example, if you show up and find out your digs have been double-booked, somehow misrepresented, otherwise not available (for example, foreclosed on -- and in some areas that's no idle worry these days), or if the owner is unreasonably holding onto your security deposit. The direct-booking sites take it upon themselves to vet the properties and deal with all the issues that may arise, and some clearinghouse sites do offer "insurance policies" which for an extra fee will reimburse your rental expenses if anything goes wrong.

As for the networks, accommodations run mostly to spare rooms in people's homes, and you're more on your own, so you need to do more of the heavy lifting yourself (mostly in the form of interacting with your prospective host online ahead of time). AirBnB, for example, offers semi-direct booking and payment, and doesn't send the host their dough until after a guest checks in but there's been increasing grumbling on the Web about the uneven quality of lodgings and a lack of customer service.

That's why it seems to me that even with all the great options out there now, a site like HouseTrip can be best for those who want a minimum of muss and fuss, and a maximum of protection. As CEO Arnaud Bertrand explained to me recently, "We hold guests' payment in escrow until after they've arrived, protecting them from fraud. The model makes a lot of sense, and definitely makes it safe for guests without the need to pay extra for that kind of guarantee."

What's clear is that both for reasons of economics and quality/authenticity of experience, here's a trend that's far more than a flash in the pan. I've often stayed in apartments when I travel, and in most cases I've been thrilled with the results. Sure, there’s no concierge or room service, but for a little while, I can indulge in the fantasy that I’m no tourist, but a resident experiencing the city like a local. And that, for me at least, is what travel is all about.

For more rental sources and ideas, check out Tripatini's Vacation Rentals group.

[Sage Rental]

Our company, Sage Rental, also offers vacation home rentals worldwide.  We're at  http://sagerental.com.

[Allie McCoy]

My husband and I rented a house in France many years ago, and it was not as clean or as big as we had been led to believe it was. I wish we had had resources like this back then! In addition, I like what Arnaud Bertrand says about holding guests' payment in escrow until they've gotten inside the door.