To diversify, or not to diversify, that is the question.
Should you be listing on multiple platforms? Or is it better to stick with just one?
Richard Fertig is the host of Short Term Rental Secrets, a YouTube channel dedicated to building a community of short-term rental hosts who learn from each other’s experience. Richard is an entrepreneur and former Wall Street Hedgefunder who signed up for Airbnb four years ago. In that time, he has generated over $500,000 in income hosting his small portfolio of real estate investments.
Listen to understand the differences among Airbnb, HomeAway, VRBO and Booking.com. Richard also shares his experience with listing on multiple platforms, discussing the advantages of diversifying as well as the complications that can arise. This is a must-listen for hosts who are weighing the benefits of listing on more than one vacation rental site!
How Airbnb is different from HomeAway/VRBO
The pricing structures of each platform
The advantages of HomeAway/VRBO
Why Airbnb is the better choice for new hosts
The case for sticking with only one platform
The argument for diversification
How to avoid the complications of listing on multiple platforms
The benefits of creating your own vacation rental website
Booking.com’s short-term rental component
This episode is sponsored by Hostfully.com where you can create a custom digital guidebook for your guests!
Complete Transcript for Get Paid for Your Pad Episode 155
Welcome to Get Paid For Your Pad, the definitive show on Airbnb hosting, featuring the best advice on how to maximize profits from your Airbnb listing, as well as real-life experiences from Airbnb hosts all over the world. Welcome.
Jasper: This episode is brought to you by Hostfully, a company that helps you make beautiful guidebooks for your listing. Make your own at hostfully.com/pad, and a special for Get Paid For Your Pad listeners, you’ll get a free guidebook consultation after you make your guidebook.
Hey everybody. Welcome back to another episode of Get Paid For Your Pad. My name is Jasper and I’m your host. And today, I have a very interesting guest. His name is Richard Fertig and he is the founder of a really cool YouTube channel called Short-Term Rental Secrets. Richard, welcome to the show.
Richard: Thank you Jasper. Thanks for having me.
Jasper: Absolutely. And today’s topic is Airbnb versus Homeaway and VRBO and what we’re going to discuss is should you list on all of these platforms or should you just list on one of these platforms and also, what are the differences between these platforms? And I don’t have very much experience myself with all the platforms and Airbnb. I’ve only listed with Windu, but Richard is actually a very active user on Homeaway as well as VRBO. So I’m going to pick his brain with regards to what are the different strategies that you want to use on those platforms and also what are the differences and what’s the best strategy—should you list on one or multiple platforms, etc. So Richard, let’s dive into it. Let’s start with what do you think are the main differences between Airbnb and Homeaway and VRBO.
Richard: So Homeaway is actually the parent company of VRBO so they’re very similar and I think the main difference is how you access it, like what url you go to. And they have a little bit of different user interface, but let’s just combine Homeaway and VRBO into one sort of platform and Airbnb as a separate one. And I think the reason Airbnb has had the impact it has had is the user experience, right. VRBO has been in the space for decades, short t0erm rentals and vacation rentals and the like is nothing new, but Airbnb sort of came to the space, with a designer background right. The founders are from a designer school. They made the user experience more like a magazine or a visual catalog if you will and then also had a couple of things that I think they continue to do very superior to Homeaway which is sort of like that community build, and the ratings, the reviewing, the mutual review of home and guest is something that I think differentiates Airbnb.
Jasper: So you’re saying that Homeaway and VRBO is actually one company. So does that mean if I created something on Homeaway, that I don’t need to create another listing at VRBO?
Richard: That’s my understanding. Now they did just change. Expedia just bought Homeaway and therefore owns VRBO as well. And they’ve changed their pricing methodology recently and so there are changes going on so I could be wrong on that. But when I listed my homes on Homeaway I just did it on that one interface and it showed up on all of their other member sites like VRBO and the like.
Jasper: Okay so it seems like we can pretty much consider Homeaway and VRBO the same site. If you create a listing on one, then you automatically show up on the other one.
Jasper: Great. And what are some other differences between Airbnb and Homeaway or VRBO?
Richard: So the most recent pricing that I’ve seen is a pretty big difference. Airbnb charges you a percentage of the host and so therefore if you list something it’s free and if you get no rentals, it costs you nothing. Conversely, if you rent and you do really well, they charge a percentage, let’s call it three percent and therefore your total dollars could be significant. Homeaway has moved to a flat rate pricing model, is my understanding, where they charge say 399 for the year and so therefore, if you have zero bookings, you lost 399 dollars, but if you have a million dollars of bookings, your percentage is very very small and that’s a much better way to go. So the pricing structure is different as well. And I think there’s also some differences in terms of who they attract and sort of the geographies where they’re better suited, and so to drill down on that a little bit. And I actually filmed a video recently exploring this because I’m taking a trip to Paris and I wanted to see for myself what a user might experience on both platforms. And it was a little bit eye-opening to me. Because my bias before filming that video was that Airbnb was much stronger in metropolitan and popular destinations where theres’s urban density and in my opinion, VRBO and Homeaway which started as a vacation rental, tended to be more where vacation rentals would be maybe second homes, ski areas, beach areas thinks like that and not necessarily dense cities. And I was surprised to see when I searched in Paris that there were equal sort of numbers of listings on both Airbnb and VRBO and I think that’s probably because people are listing on both platforms.
Jasper: Right. I looked up a few numbers before this call and I noticed that Homeaway is advertising that they have about 1.2 million listings and I’m assuming that includes all their different brands whereas Airbnb, I think the latest number was in the proximity of 3 million listings. So I’m also definitely a little bit surprised that Homeaway has just as many listings as Airbnb in Paris because Paris is Airbnb’s biggest market.
Richard: Yeah, well if you think about it, the pricing methodology sort of makes some sense. If you’re in a really popular tourist destination, then the flat rate pricing isn’t a barrier to entry. If you’re committed to short-term rentals, right. In fact, it might actually be advantageous. You might be more profitable just listing on Homeaway or VRBO at a flat rate, versus paying 3 percent commission after every rental. The flip side is, which is why they have less listings overall, is if you’re new to the space, if you don’t really know if this is going to work for you. You’re not sure how often you’re’ going to do it. You don’t know if people are going to want to rent in your community, you might just list on Airbnb because it’s free and there’s no real downside risk. Versus paying 399dollars out of pocket to just see and experiment.
Jasper: So for those people out there who are not sure about whether they want to be a short term rental host and if they just want tot get their feet wet, it would be best to start with Airbnb and get the feet wet, it would be better to start with Airbnb and experiment and maybe get a couple bookings and get some experience and later if you decide to actually build a sustainable, long-term short-term rental business, then you might think about expanding to those other platforms.
Richard: That’s right. And maybe, and you touched on this in the introduction, maybe even listing on multiple platforms and I know you had some questions over whether you should or you shouldn’t. Is this a good time to move towards that?
Jasper: Uh yeah. Absolutely. I think this is a really interesting topic, whether you should focus on one platform or whether you should diversify into multiple platforms. Now let me just quickly give you my perspective because it has changed actually a little bit over time. Now, when I just started with Airbnb, I Noticed it was really important to build a very strong reputation on the platform. And so that means if you get a lot of bookings, you get a lot of reviews, you have a lot of activity, that you’re listing’s getting bumped in the search results, which then causes you to receive even more bookings. I saw it as kind of like a small ball fact. So I always advise people if you’re in a big enough market where there’s enough demand on Airbnb to fill up your calendar, to reach almost like let’s say 80 to 90 percent occupancy, then I’ve always advised people to just stick with Airbnb, versus spreading yourself too thin over multiple platforms, and not having a very strong reputation on any one of those platforms. However, recently, I’ve noticed it’s becoming harder and harder to sort of beat the competition on Airbnb and I’ve seen more and more hosts who are struggling to reach that full occupancy just on Airbnb. So I’ve started to shift my opinion a little bit in favor of using those other platforms in order to capture more of the market. So I’m really curious to hear what are your thoughts on this?
Richard: So, as you might expect, I have a variety of thoughts. I’m going to share with you my real life experiences and I completely agree with you. You want to build credibility and reputation and go towards being a super host or even a team super host status if you can. And if that means that you can’t or don’t list on other platforms while you attain that, then shoot for that goal. But what I have found personally is, I have multiple properties listed. I have one property that’s legally listed in new york city that I’ve only done on Airbnb and I have never put on Homeaway or VRBO because as to your point, I’ve been very successful and I don’t know exactly what my occupancy rate is, but it’s in that 75 to 80 percent range which is where I like to be, and charge a fair, but high nightly rate. I could be at a 100 percent if I wanted to just by lowering my price, but I don’t want to do that. So I’m comfortable with that. But just yesterday, I was filming a new Youtube video. I’m listing a home up in Windom, New York, which is a ski area and it’s great hiking in the summer and so on. But on the drive back, I was saying, you know what, if I can get my price on Homeaway after dong that Paris search and fill up the other 15 percent, then that kind of makes a lot of sense. Why would I want any occupancy? Now, I’m already a super host and I’m already doing super well and I’m totally satisfied with just Airbnb o n that property, but it just struck me, I might be leaving a lot of money on the table. 15 percent of a prime location that could be going to a 100 percent occupancy would be rally nice. So I’m contemplating putting that on there. There’s other properties that I have where I started with both Airbnb and Homeaway at the same time. One down south in Alabama and I have another to rent in Colorado. I’m a big skier. And it’s interesting, right before the show, I took a look at the number of reviews I have on each of those listings and if you had asked me before I had looked it up, I would have said that Homeaway is actually the lead in those communities, again more of a vacation place. In Alabama, I have 18 reviews on Airbnb and only 19 on Homeaway, so it’s 50/50. Therefore, in my opinion, it’s good to be listed n both, because I still have some occupancy, and if I was only on one, I might only have 18 reviews as opposed to 37. So in that particular case, Alabama, it’s clear to me that listing in both ahs been really helpful. More interesting though is Colorado which is literally just a vacation place. There’s nobody travelling there just for business. There’s no conferences. There’s nothing that would take you thee other than hiking in the summer and skiing in the winter. And that’s sort of what I said earlier is the bread and butter of VRBO. It stands for vacation rental by owner and they’ve been doing this for decades. And so in this vacation community, the guests, the people that travel there, have been looking at VRBO and Homeaway for decades for rental properties and they continue to do so. And there, I have 24 reviews on Homeaway and only 6 on Airbnb. So if I had only don Airbnb in that instance, I might be in a real painful position from a financial perspective and think that there’s no short-term rentals to be had and that maybe this investment on property and vacation homes and so on was a big mistake. But because I’m on Homeaway, it’s turned out to be fantastic.
Jasper: Interesting. So basically we can conclude that it depends on the location. If you’re in a typical vacation area, a ski resort or somewhere on the beach, you might actually get more bookings through VRBO and Homeaway, than Airbnb versus if you’re in a big city, you might be just fine with just a listing on Airbnb.
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The next thing I want to get into is, what are the complications of listing on multiple platforms? Like for example, how do you prevent multiple bookings? How do you make sure all of your listings are updated? Comment on that.
Richard: And yeah, that’s a really good question. It’s something that takes a little bit of diligence and practice and you just have to get used to it. So, both platforms have the ability to updated and sync the calendars because they recognize that nobody is going to be beholden to anyone. They have APIs where the calendar syncs and so on. It’s not perfect, Jasper. I’ll be perfectly honest Jasper. It’s not perfect. Like for instance, I’m still wrestling with the fact that when somebody makes an inquiry on Homeaway, that tends to block the calendar on Airbnb. So even though it’s not booked, it puts a hold, or that’s how Airbnb reads, it on those dates and therefore it blocks the calendar. So there is some manual you know, diligence, and you have to be sort of involved with it. But if you do that, then you shouldn’t have any double booking. I’ve only had one double booking, which was completely my accident, human error. I forget exactly what the circumstances were, but I had to cancel on the guest and that was awful, but I was very helpful in getting them placed in another similar home. It turns out that the people that cleaned my home in the area cleaned several homes and they had some vacancy and it was a similar property. So I did everything in my power to be a good host and help them out but that’s a problem and it kind of stinks.
Jasper: Yeah and it’s something that can have very significant consequences because if you cancel one single booking on Airbnb, that means you lose your super host status.
Richard: Yeah, that’s true, but I will also say the following going back to the comment earlier, which is I don’t necessarily know, in this space which is emerging so quickly, where there’s so many hosts and guests and opportunity, that I necessarily want to be beholden on any one company and their SEO and I’ll give you an example for that. I run another business as well and Google is the biggest search engine. If you ever did anything to upset Google and be penalized your business suffers tremendously. I did something recently on Airbnb that I think has affect my SEO, but I turned off instant booking in my super host place and the reason is that I had a couple of bad experiences back to back. I think there was a security breach and the account was hacked. Both on instant book and I know that you can cancel three times, but because the account was hacked, I had no reason to cancel because they looked like good guests. So I turned off instant book to protect my home and my investment and feel good about it, but I know that that has some implications on the SEO of Airbnb. And that’s where maybe having a couple of business partners makes a little bit more sense.
Jasper: Right and I think you’re definitely touching on a good point. If you’re listing on a couple of platforms, you’re not dependent on one platform, right. There’s also a chance that your account gets cancelled on Airbnb. There’s been examples of quite a few hosts that have been kicked off the platform without any reason. The most famous one is actually a former podcast guest. His name is Kelly Kampen. If you want to read his story, you can just Google Kelly Kampen Airbnb. He wrote a big post on medium and he was one of Thailand’s’ most recognized hosts. He actually received, in 2014, he received an award as the best host in Thailand and he’s still confused as to why Airbnb closed his account. So yeah I mean I think that’s definitely a good point. You don’t want to be dependent on one business partner. I can also comment on that because I have some experience. I have actually had a business in the past where I was fairly dependent on Google and when one of the updates hit, I can’t remember if it was Pomlow or Penguin or some other animal with a P. But in any case, my traffic pretty much declined by 80 or 90 percent and that was pretty much the end of my business.
Richard: Yeah and you know, you can’t see it coming but you can prevent it by listing on multiple platforms. At least you’re giving yourself a shot to call the shots and have a business that continues. And then the next extension, one that I’m wrestling with, and I’d be curious to hear if you have an opinion is I see more and more people listing on their own websites and creating your own brand if you will.
Jasper: It’s interesting that you just mentioned that because I’ve actually been working on a review of Luxify, which is a company that you an use to simply create your own vacation rental website, so I’m been playing around with it and creating my own vacation rental website. Yeah I think there are some arguments to be made to have your own website. You know when it comes to branding, it’s kind of like an online business card. You know, in your personal network, you can tell people, hey, if you ever want to stay in my city, here’s my website, uh take a look. Those people can share that website and it’s a bit easier to share. For example, let’s say, like richardsgetaway.com, than to share Airbnb.com/rooms/63706 or something. And also it might help a little bit in terms of returning customers. If the customer, if the guest knows and if they have a business card or they have a link and they know where to find your own website, then the chance might increase that they can come back. So and then there’s the argument that you can create extra content. For example I saw one of your videos, you were a little bit upset that you can’t post videos on your profile which is also a really interesting point that we can talk about another time. But Airbnb gave us the functionality of recording a video and then you can’t post it, which doesn’t really seem to make sense. But if you have your own website, you can get pretty creative. You can post all sorts of videos and so it can also help to build some reputation. It could even be that people who look on Airbnb, they might just Google the name of your property on Airbnb to see if they can just book directly and therefore not have to pay the booking fees that are pretty high on Airbnb. You know, like I Just recently booked place in Taiwan and I think I paid like 250 bucks in booking fees. So yeah I think there’s’ definitely something to be said for having your own listing, or website.
Richard: Yeah I think the biggest value I see is what you touched on, which is being able to create additional content. The home that I listed that I took the photos of yesterday, I actually went out there with a drone and took all sorts of video from the air because it’s a ski in and ski out home and I wanted to show people just how close it is to the slopes. It’s a little challenging because there’s no snow. It’s summer here. But the point is that video is going to be the best way to show how this is so close to the ski slopes or it’s beach front property. Anything where you’re really trying to show location, aerial footage is amazing. The one thing I also wanted to pint out was there’s anther competitor in the space that we really haven’t touched on. I have no experience with it but I’m going to do some work and list some of my properties on there and review it on my YouTube channel in the near future. And that’s booking.com which is owned by Priceline and in fact it turns out to be I think the biggest revenue and profit center in the entire Priceline universe and I know a lot of people, especially a lot of serious short-term hosts, that have many many properties, more like property managers that swear by it. So I’m going to turn my attention to that, list a couple of properties on thee, and review sort of the user experience as a host, the on-boarding, and then also, booking, did I get bookings, were the rates good, the fees and all that.
Jasper: Yeah I think booking could be an interesting platform. Their headquarters are in Amsterdam. I’ve actually visited their headquarters to talk about some potential opportunities, but I n any case, it used to be the website for hotels, but they actually have a very large inventory of short-term rentals on the platform, that they, until recently, haven’t really focused on, but now they’re starting to focus on it more and more. So I think that booking could be another good generator of income. And also, the advantage of booking.com for the host is that people who book on booking.com generally seem to be a little bit more easy to deal with because they don’t have that many questions. They don’t expect so much from you as a host in terms of communication and in terms of attention to the guest, because they’re more used to staying at hotels.
Richard: Right. It’s more transactional and less of that community that I touched on earlier about Airbnb,
Jasper: Exactly. Exactly. When I was in Chile for example, I stayed in an Airbnb and the person that managed my listing actually manages a lot of listings and he told me he uses booking.com and he told me her prefers booking.com bookings because people ask fewer questions, have fewer demands, and so he actually really liked it.
Richard: Well, I’m going to do some work on it and post a review on that YouTube channel, short-term rental secrets. So if you’re interested in that, look for it.
Jasper: Absolutely I’ll keep an eye out for it. I’ll say one thing against booking.com. I’ve heard that the interface is much more difficult than Airbnb and also I think they charge a much higher fee. I think they charge 20 percent.
Richard: Yeah I heard it’s a higher fee as well. But at the end of the day, you can always adjust your rates and if it’s net, net, the same in your pocket. In other words, if the people that are searching booking.com are prepared to pay a higher transaction fee, and I don’t know whether they are or they aren’t, but what we care about as hosts is really the money in our pocket. So if I was charging a hundred dollars a night and I was paying Airbnb three percent, 97 in my pocket. I wouldn’t list this on booking.com and at a hundred and accept 80. I would start at a higher rate and just see if I could get the same amount and if I couldn’t, then that would sort of be a negative or a strike against booking.com.
Jasper: Absolutely. Totally agree. Well, thanks for this conversation. I think we could probably talk for a few more hours if we wanted too.
Richard: Oh, sure.
Jasper: I’ll definitely have you back on the podcast at some point in the future. Do you want to let the listeners know where they can find all of your awesome YouTube videos?
Richard: Yeah, so go to YouTube and subscribe to the channel. It’s called Short-Term Rental Secrets and we’re creating content for free three days a week and people seem to really like them, you know, a lot of engagement. And our goal really is to put more money in your pocket, so if you have questions, hopefully we’re adding value and helping you grow your business.
Jasper: Awesome, well I’ve been working on my own YouTube channel a bit, but I’m not really an expert, so I’ll probably be picking your brain in the near future to see if I can get some tips for how to make cool YouTube videos.
Richard: I’m happy to help and I’m also going to offer you to come and be a guest, whatever, YouTuber with me on my channel and review your book and so on. I think there’s plenty of opportunity for bright people to grow business and we welcome you with open arms.
Jasper: Awesome. I appreciate that. All right, Richard, thanks again, and for all the listeners, next week we’ll be back with another episode, so, see you then.