What are the Advantages of Direct Booking for Vacation Rentals?

Why is Direct Booking Better for Your Vacation Rental Property?

By: Brad Greiner, CEO of Open Air Homes and OpenAiRE Brokerage

October 26, 2022

We’re grateful for the variety of booking platforms that are available for short-term and Month+ rentals. Placing our homes on the websites mentioned above has allowed us to reach a wider demographic, hone our audience, and fine-tune our marketing approach for each one of our unique homes. However, we believe that direct booking should always be one of any hospitality company’s goals. The majority of bookings for rentals should always be direct. 

A Bigger Return on Investment

“The Value of Direct Bookings” report by VRMintel notes that the average worth of an Airbnb booking is around $906 per reservation. Compare that to the average value of direct bookings at $1,935. That’s a whopping $1,029 difference. A direct booking in this instance is worth over double that of Airbnb.

More Say in Who Stays

Direct bookings for vacation rentals give hosts more control over who stays in their homes. This lowers the likelihood of damage, upset neighbors, and safety incidents. Hosts can screen prospective guests, which allows them to mitigate potential emergencies before they arise. Are you against hosting bachelor and bachelorette parties in your home? Platforms with an Instant Book feature may line up a string of celebrations before you even realize it, leading to an issue that may prove to be a pain.

No Relying on a Finicky Algorithm

While sites like VRBO and Airbnb are great vacation rental platforms, we always encourage vacation rental hosts to eventually create their own direct booking channel. Relying on apps and websites is always an enormous risk – algorithms and policies can change overnight, taking you from a Superhost to shadowbanned.

They also aren’t too forgiving of mistakes. While we discourage homeowners and hosts from canceling stays, we understand that accidents happen and emergencies occur! However third-party platforms aren’t quite as understanding. However, cancelations can be a death sentence for homes on Airbnb, tanking visibility and lowering your ranking to a spot that’s very difficult to bounce back from.

Shifting our Focus to Direct Booking

In 2020, Open Air Homes raised a round of funding from investors, and we began to professionalize our entire organization – from operations to reservations to revenue management. 

Our first goal was to develop a website that was distinct from cookie-cutter property management websites that are available as a template. We spent 6 months developing a new site, with the goal of Open Air Homes resembling a hotel or hospitality brand as opposed to a property management company that offers cookie-cutter vacation homes. 

It was during this time that we began looking more closely at our revenue split from various partners – Airbnb, VRBO, MisterBnB, Plum Guide – in comparison to direct bookings.  

What Online Booking System is Best for Your Vacation Rental?

Direct Booking vs. Airbnb

In 2019, about 80% of our bookings came directly from Airbnb, with VRBO coming in second. However, after looking more closely at our company and future goals, we knew that we couldn’t rely on an external booking platform. We made a strong push to strengthen our partnerships with smaller players, but more importantly, we began very serious efforts to drive direct bookings on Open Air Homes. 

How do I Attract Direct Bookings to my Short-Term Rentals?

In order to entice guests to book directly on our platform, we had to provide prospective renters with an incentive. It’s not easy to make direct booking look more attractive to guests than the convenience of a third-party site with millions in venture capital and seemingly endless options.

Consider these tactics to drive direct bookings to your vacation rental property: 

• Money talks. Ensure that the lowest price for guests is via direct booking than on any other platform.
• Give homeowner partners with an incentive! Have them earn a higher net revenue via direct booking than any other platform.
• Provide perks. For example, we’ve partnered with Safely Insurance to provide a far superior insurance partner than online travel platforms (for both our homeowners and guests). 

We are pleased to announce that for the year 2022, we had our first year where direct bookings were higher than any other platform.  A total of 55.8% of our bookings are now coming directly from our website, with online travel partners making up the other 44.2%.  

That’s huge!

Need proof? Take a look at our chart from Guesty:

We’re still wrapping our heads around just how quickly we could pivot from relying on other booking platforms to taking over 55% of bookings directly within two years. Our team here at Open Air Homes deserves the credit, and we can only hope that this number grows.  

When meeting with our Customer Success Manager at Guesty, she initially thought there was a glitch in the system – these results are not the norm for any property management company she works with. 

In fact, in the first quarter of 2022, the share of direct bookings averaged 19.1%, increasing from an 11.8% average in 2019 (source). 

As a Property Manager, how Should I Invest in my Direct Booking Channel? 

If you are a guest

The lowest rate available online is very often found on a property manager’s website if they have invested the necessary time and energy to focus on direct bookings. 

If you are a host

Now is the time to invest in your website and develop a strategy around how you are going to encourage direct bookings.  

If you are a homeowner

Look for a property management company with a strong online presence and a focus on direct bookings.  If you currently have a property management company not focused on direct bookings, you are leaving your net revenue potential up to the whims of these public or large-scale booking platforms, and what to them can seem like small changes to their algorithm or policies, can significantly impact your net revenue per month. 

Partnering with HostAI

Further, we are excited to have partnered with HostAI in their beta program to continue the drive towards more direct bookings. We cannot divulge much more information about what HostAI is building, but if you are a property manager, we encourage you to sign up and receive more information from them when they come out of beta.

Direct Booking for Vacation Rental Properties

The industry continues to become more fragmented as property management companies professionalize and learn not to rely only on these platforms, similarly to how boutique hotels offer fun perks and the lowest possible rate when booking direct.  The short-term rental industry is going through the same metamorphosis, and to stay ahead of the curve, direct bookings will play a critical role in your success, as it has ours. 

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