Citing a PhocusWright study, FlipKey highlights over 350K second home owners queued to begin offering their vacation homes to travelers more frequently

January 15^th Boston, MA:  With the vacation rental market estimated at $24B, the growing and popular lodging sector motivated PhocusWright – a leading travel research firm – to conduct the industry’s first ever dedicated market study.  Co-sponsored by 14 industry players including FlipKey.com – a leading vacation rental site featuring the industry’s largest collection of verified guest reviews – the study estimates 1.26M second homes are available for rent in the U.S. for families looking for an alternative to hotels and other lodging options. 

The study identified that 56% of the vacation rental market is represented by rent-by-owners with the remaining 44% of vacation rental homes managed by professional property managers.  Encouraging for the growth of the industry, the study highlights 50% of rent-by-owners are casual renters, offering their units primarily to friends, family and through word-of-mouth.  As the economy continues to place additional financial burdens on second homes owners, FlipKey expects more of these casual renters to become increasingly active, working independently or through a property manager to offer their home more frequently and to travelers beyond family and friends. 

“Although there are 1.26M vacation homes that have been rented, it doesn’t mean they were made available to the general traveler,” stated TJ Mahony, CEO of FlipKey.com. “When we pealed back the layers of the study we estimated there are 350K casual renters that don’t necessarily make their home available beyond their immediate friend and family network.  It’s reasonable to assume the current economic environment will help motivate many casual vacation rental owners to become more active.”

FlipKey defined an ‘active’ renter as an owner that markets their home to travelers beyond their family and friends network.  Mahony summarized, “if an owner actively markets their property online and rents their unit to two or more people completely outside their personal network each year we consider them active.”

When renting a vacation home its imperative vacationers feel comfortable and confident in the home and manager/owner of the property.  Vacation homes overseen by property managers and active owners often provide strong customer support, clear check-in / check-out processes and other support services consumers value.   Mahony concluded, “Given the economy and growing support and marketing services available, there is a clear opportunity for more of these casual participants to become more active, renting their homes more often, yielding increased rental income.”

About FlipKey

FlipKey^™ is a leading vacation rental service featuring the world’s largest collection of verified vacation rental guest reviews. FlipKey believes reputation, trust and feedback from past guests are the best resources to ensure consumers find the ideal vacation home. FlipKey currently features more than 60,000 vacation homes offering vacationers the unique advantages of more personal space, superior amenities and ideal locations throughout the United States, the Caribbean, Canada and Mexico. FlipKey is majority owned by TripAdvisor, LLC, and is a member of the TripAdvisor Media Network, attracting more than 32 million unique monthly visitors* across 12 popular travel brands. FlipKey is available at http://www.flipkey.com

*Source: comScore Media Metrix, May 2008

© 2008 TripAdvisor LLC. All rights reserved. 

A few months ago my friends and I were planning a trip to Las Vegas. Being in the Vacation Rental industry, I decided to float a crazy idea out there about where we should stay – in a vacation rental! The reaction from the group was consistent and discouraging, “Renting a house in Vegas? Not staying on The Strip? Blasphemy!”. I had inadvertently touched a nerve that exemplifies one of the industry’s major challenges – how do we educate people to understand that vacation rentals are a preferable option to hotels?

Armed with a bevy of insider facts and figures I diligently went to work at swaying the group. I found a few great housing options and explained the benefits.

My home for the weekend 

Cost

Eight of us were going on the trip. For five nights we were looking at four hotel rooms at about $200/night on The Strip. Total cost = $4000.

The house I found was about $1500 for five nights. It contained ten separate beds across 6 bedrooms. Total cost = $1500.

Food & Beverage

My chosen house had a full kitchen and a 6-foot long grill out back. A quick trip to Costco on the first day and we’d be eating an assortment of breakfasts, lunches, dinners, and late night snacks at the house. Compared to the Strip’s exorbitant food prices and $7+ drinks, this was another significant area for savings.

Socialization

The reason we were going to Vegas in the first place was a reunion of sorts. We all went to college in Virginia together and have become scattered across the country over the last 10 years. Thus, it’s rare that we all get together and this trip was an opportunity for us to catch up. The rental house offered ample space for relaxation and entertainment. It included a beautiful pool, hot tub, pool table, poker table, big screen tv, and a patio with a gorgeous gazebo out back.

Location

This was the final barrier to entry for everybody (self included). The house was about three miles off The Strip. However, we decided that the rest of the benefits outweighed the location, and we took the plunge. Having just returned from the trip, I can now safely say that the location was not as big of an issue as we thought. We rented a van for about $300, and it was only about an 8-minute drive to The Strip. When the occasional taxi was needed it was a reasonable $20 trip. The van even paid for itself with all the airport pickups and drop-offs that would have otherwise required taxis.

Ultimately, we ended up spending more time at the house than anywhere else and everybody felt it was their best trip to Vegas ever. Vegas can be a grind of long hours with minimal sleep, but the vacation house offers a much-needed respite from the indulgences of The Strip.

While heading to the airport on our last day, my friend said it best: “You know, in a year I’m not going to remember the hundred bucks I won or lost at the blackjack table. But I will never forget how much fun we had at that house.”

I have been a vacation rental manager for the last six months in hopes of renting my condo during the tourist heavy summer in Boston.

I would estimate 80% of the inquiries I receive via the listing service I use are legitimate guests looking for accommodations. I find many are a bit ‘cheap’, aggressively trying to reduce my (very reasonable) rates, but they are good people for the most part.

The remaining 20% I would characterize as ‘Un-Spam’ – meaning, people that don’t realize they are sending me unreasonable requests.

• A man from Idaho asked me if he could rent my two bedroom condo for one night for himself and 20 of his closest friends. (That was not a typo – 20 friends)
• At least 2 people each week ask to rent my unit on a week that is already clearly booked on my calendar
• A woman from Texas offered $50/night for three nights in exchange to keep it ‘clean’
• A lot of house swap offers

My place is booked for the rest of the year and to cut down on the Un-Spam I have blocked off my calendar, but I continue to get about 3-4 inquiries a week. I don’t see this as a bad thing and more of an illustration of how demand for vacation rentals exceeds supply.

I believe there are some simple solutions to cut down on Un-Spam and I will explore potential solutions in future posts.