While Airbnb inks petition signatures, HomeAway inks landmark business deals

I find it interesting that the two biggest names in online vacation rentals, Airbnb and HomeAway, exhibit such stark contrast when it comes to their respective press headlines.  Although Airbnb focuses more on peer to peer shared accommodations, both companies are in no short supply of whole unit rentals which people like you and I can book on their sites.  Yet Airbnb seems to be under intense legal scrutiny while HomeAway flies more or less under the radar.

Airbnb has taken big hits in New York recently, having been subpoenaed by New York's Attorney General to provide personal data for up to 225,000 of its New York hosts.  Airbnb has publicly expressed that the request is unreasonably broad and that the company will fight it with everything they've got.

And so the fight continues in New York, and Airbnb has armed itself with artillery.  On the lighter side, a Save Airbnb in New York petition has drummed up over 70,000 signatures and far exceeded the original goal of 20,000 signatures.  Did you know this petition was started by one of the company's users?  It's impressive to see such die hard fanatics the Airbnb brand/experience has cultivated.  In full disclosure I'm also one of them!

For the heavier artillery, Airbnb has released an economic study that shows it generated $632 million in economic activity in New York City in just one year, and that 82% of all listings were in neighborhoods outside the traditional tourist zones in Midtown.  Surprisingly 87% of Airbnb hosts rent out the home they live in and earn on average $7,530 per year.  Critics argue that Airbnb's contributions are just a drop in the ocean when put into the context of overall New York City tourism receipts, but for such a young travel company to impact outlier neighborhoods the way it has in New York and other major international cities is down right unprecedented.

So while Airbnb was caught up in a defensive web of legal issues, petitions, and lobbying, what was HomeAway up to in the last week?  There was no sign of HomeAway draining valuable resources on legal battles.  Instead they were gettin down to business with launching a new commission-based business model and inking a landmark distribution deal with Expedia which should significantly boost the demand profile for their vacation rental product starting in 2014.

But interestingly this vacation rental product isn't so different from the type of product that Airbnb is coming under fire for in New York.  The legislation that should apply equally to both companies is the ban on short term stays of less than 30 days when the owner or leaseholder is not present.   But a quick search on HomeAway properties in Manhattan shows over 1,000 whole unit listings available.  Many of these only require a three night minimum stay if any.

This is certainly just speculation, but it's possible that HomeAway and other vacation rental sites may be cooperating with government requests for submitting user data.  If that's the case, and again this is just speculation, then I believe all the more reason to admire Airbnb for putting up a public fight in New York to protect user privacy and not taking the easy way out like some of these other tech companies.

What TripAdvisor can teach independent hotels about shifting share from OTAs

A big score for independent hotels (and of course TripAdvisor)

There's certainly no shortage of activity coming from TripAdvisor.  The company recently shifted some focus to metasearch, redesigned its site, acquired content-rich Oyster.com, and launched the independent hotels' newest best friend . . . TripConnect.

TripConnect is a new service that empowers indie hotels like never before when it comes to online marketing and driving direct sales and bypassing OTAs.  These smaller properties can now integrate their web booking engine to TripAdvisor's metasearch, and thus display live rates and availabilities for shoppers who perform a dated search.  By combining the hotel's presence on TripAdvisor metasearch with the right room pricing and bidding strategies, the savvy indie hotel operator can take the first series of steps in winning back channel share from OTAs.  And as OTA click through and conversion rates decline for a particular hotel, they just might scale back their own bidding and thus reduce marketing costs for the indie operator in the long term.

But what about Google?  For those indie hotel operators that have AdWords campaigns running already, should they be plugging into TripConnect and shifting marketing spend to TripAdvisor?  In general it's a wise approach to diversify and spend on both Google and TripAdvisor.  After all, TripAdvisor is one hell of a strong brand, but there are areas in the world where their name is virtually unknown.  So answering this question in detail really depends on the hotel product, destination, and its primary source markets.

But one thing is for sure.  Because TripAdvisor's metasearch allows for dated searches and the new TripConnect service plugs directly into indie hotels' booking engines, there is no wasted ad spend on dates that are unavailable because it wouldn't be possible for the shopper to click through in the first place.

Furthermore, TripAdvisor creates a smoother shopping experience (from research to price shopping) which should ultimately lead to a more highly qualified customer.  In the e-commerce world of performance marketing, that usually translates into much better conversions.

TripConnect offers a number of other added benefits, but at the end of the day it all boils down to one thing.  Independent hotels now have the most powerful tool to help them claw back bookings from high cost OTA distribution channels.  The fact that it's more effective than Google AdWords or Hotel Finder is just icing on the cake.

Google.  It's your move now.

Example of TripConnect in action.  Although in this case HotelClub's lower price is undermining the hotel's efforts.

Airbnb versus New York City. The saga continues over a subpoena for data on NYC hosts.

NYC still has 1000+ listings for entire apartments

There's been no shortage of drama between Airbnb and New York City regarding the legality of short term rentals.

It all started with a man named Nigel Warren, a New York resident who was fined $2,400 for renting out a room in his apartment on Airbnb.  Late last month, a New York judge reversed the fines in a victory for Nigel and Airbnb who had appealed the earlier decision.  It turns out that it's actually not illegal to rent out a room as long as someone is physically present in the apartment at the same time the guest is staying over.  Airbnb dodged a bullet on a technicality, although many more are likely to be shot over the plethora of vacant apartments that are rented out by landlords or property managers.

And then there's the hotel industry blowing the whistle on Airbnb hosts because they don't pay the city occupancy taxes that hotels are required to pay.  Airbnb's CEO, Brian Chesky, has for the first time acknowledged that most hosts should have to pay some sort of occupancy tax.  Could this be a peace offering move to prevent any possibility of widespread removal of all host listings?  It's important to note that what happens in New York City will likely create a new paradigm for other cities, with reports that San Francisco has also reached an agreement with Airbnb that would require hosts to pay occupancy taxes.

And with that, it didn't take long for New York Attorney General, Eric Schneiderman, to demand user data for 225,000 New Yorkers who have previously listed a room on Airbnb.  The data is being subpoenaed as part of an investigation into people who had possibly violated the law by renting out their room without being physically present.  If Airbnb does provide New York's AG with this info, we can reasonably assume that hundreds of Airbnb hosts would be served up fines or have to pay taxes retroactively.  A quick search on Airbnb's listings in New York City show that there are more than 1,000 listings even after filtering for "entire place" units only.  In theory, the vast majority of these "entire place" units are rented out illegally.

It should almost go without saying that Airbnb will not comply in an effort to protect the privacy of its community and user data.  As written on the company blog, "this demand is unreasonably broad and we will fight it with everything we've got."

The blog goes on to say, "As these conversations continue, we will always be committed to protecting our hosts' privacy and we will always stand by the hosts who are the heart and soul of this community."

Now that is an awesome company sticking up for the privacy rights of its users!  I just hope that Airbnb holds true to their battle cry, even if legal pressures begin to mount against the company to hand over its user data.