Direct bookings vs. using OTAs (Airbnb, HomeAway and the like)

Posted on July 10, 2018

Once upon a time, a few guys (and gals, I assume) had a great idea: Let’s create a website that lets people list their homes/rooms so other people can pay to use them. Genius! The result was HomeAway, Airbnb, Flipkey and dozens, if not hundreds, of lesser-known copycats. Aggregators popped up, scraping all of them to help you find the perfect home, and big boys like booking.com started pushing into the space, finally realizing the potential of homes vs. traditional hotels. 

The business model is simple enough: For the traveler, services like Airbnb et al. make it easy to find a great place to stay – and Airbnb et al. takes a fee for that service (in most cases). For the owner, using booking services drives guests to book their places, making them money – and the services like Airbnb take a fee for that as well.  

For some (Airbnb), it worked great – you can’t argue with a $30+B valuation and over 4 million listings. For some (FlipKey), not so much – no need for details here.  But then, something funny started happening: People started hating on those platforms. The main victim seems to be VRBO/HomeAway, with thousands of people joining Facebook groups with the sole purpose of “saying no to VRBO." When said platform decided to remove phone numbers from listings and subsequently conversations (prior to booking), thousands of people in hundreds of threads got really, really angry. And if only half the people who threatened to do so actually closed their account with HomeAway when they introduced the much-despised travelers fee in 2016, they would have lost what felt like millions of users.  

It’s gotten to a point where there are individuals and entire companies dedicated to “helping you break free from OTAs," which is what those platforms are called, promoting “direct bookings” as the way of the future.  

What Happened Along the Way

So where did it all go wrong – and why the big fuss? Well, there are reasons to be unhappy, no doubt: Censorship has gone from non-existent to nazi-like, to a point where some of our hosts' answers are being blocked without containing the trace of a number or address.

  • Fees have increased on almost all sites and keep changing almost as frequently as White House staff.
  • Sites send you guests for dates you’re not open, and then force you to pay $150 for even the very first cancellation (Yes, you, TripAdvisor).
  • The flurry of mergers and acquisitions, especially around HomeAway, has led to a convoluted, buggy and overall, somewhat disappointing product that understandably does not make early users of any of their acquired platforms happy.
  • Support for hosts has been chronically weak on 3 out of the 4 big platforms (with booking.com being the noteworthy exception).

So, it’s understandable why some people might get frustrated with the things that have been happening and the maybe-not-so-bright future that lies ahead with some of these sites. But in the end, it all boils down to a simple question:  

Do you want guests or not?  

Welcome

Yes, you can set up your own website, promoting direct bookings. And yes, there are some great tools and companies that will help you do so. But if you understand even a little bit about how SEO and online traffic work, it’s quite obvious that – unless you run an absolute niche product – you’re not going to outspend Expedia, the Priceline Group and Airbnb, and therefore are not going to capture any significant chunk of their traffic.  

And while, especially once you grow to a certain size, it absolutely makes sense to list your properties on your own website, even if only to make it cheaper for recurring guests to book, you simply cannot afford not to list on the big sites. You can’t. Not even the biggest player in the US market can: They don’t list on Airbnb in certain markets – which is great for us, because we get clients from them. And I quote: “We’re not getting enough traffic, I feel it’s because we’re not on Airbnb...can you help us?"

It doesn't even matter if that’s a fact or just a gut feeling – because even the feeling means our competitor just handed a client over to us. That’s how strong Airbnb marketing is.

For GoNitely, OTAs are the way to go – for now. Are we 100% happy with how they do things? No, absolutely not. But they drive traffic. They bring guests. Lots of them. And that’s what keeps us alive and thriving.  

Until things change drastically, once you’ve made the commitment to an OTA, just accept it with all the conditions (because, why would you even want your guest’s phone number before you have a confirmed booking, if not to circumvent the platform that brought that very guest to you?)  

 If you can make it work without using any OTAs, maybe by occupying a niche and building a great website that allows for direct bookings, I salute you. But for 99% of owners and managers, that’s unlikely. And with Google integrating booking.com results into Google Maps - and now making a push into the vacation rental space itself - we don’t see that scenario changing anytime soon.  

What’s your opinion – do you use direct bookings? Let us know in the comments! 

Share This Story, Choose Your Platform!

About the Author:

Picture of Markus
Proud father and husband, humble leader. Currently revolutionizing short-term rental management with GoNitely. Living in beautiful California close to San Francisco.

Recent Posts