Online vacation rental industry poised for growth

Online vacation rental industry poised for growth

DepositGuard, a web-based platform designed to increase security and transparency for online vacation rental transactions, conducted a survey of travelers to determine the reasons behind existing hesitation to select vacation rentals when choosing accommodations. The study shows that despite strong industry growth, estimated to be up 13% over 2010, there are still inherent deficiencies remaining in the effort to win market-share from hotel companies. The study infers that by clearing these hurdles, the vacation rental industry should attain more rapid growth.

Just under half (46.3 percent) of the survey respondents have not used an online service to rent a vacation home in the last 3 years.

According to the survey, the largest traveler concern is property misrepresentation. The fact that every vacation rental is unique is one of the inherent advantages the industry has over traditional lodging. When a traveler books a room with an established hotel brand, they know exactly what to expect upon arrival — not necessarily the case with vacation rentals, where there is a need for the traveler to be confident about how a property is represented.

The second largest consumer concern is sending payment to someone they have only met online. Vacation rental owners are small businesses and rightfully need guaranteed payment in advance of the stay. Yet, this is one of their customers’ main worries.

These two concerns mark a significant challenge for industry growth because standard processes don’t remove these hurdles. “Vacation rentals have become a center for press and media sensationalism, when, in essence, we don’t need long checklists for payment security and property verification,” said Alan Lane, DepositGuard’s Co-Founder. “We need simple solutions.”

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The survey also showed that 78 percent of traveler respondents said they would rent vacation homes more often using an online service if their payment was submitted upon booking, but released to the owner only after they arrived and personally verified the property. And more than 60 percent of respondents would be willing to pay an additional fee to have the payment securely held by a neutral 3rd party. Consumers don’t mind paying a little extra for the security that they feel the homeowner should provide surrounding money and verification; and then they’re willing to rent more frequently or for the first time.

“The data obtained from our survey allowed us to make critical business decisions around the new DepositGuard platform for the vacation rental industry,” continued Lane.

Even when offered travel insurance at the same cost, 91 percent would prefer a payment-holding service, instead of an additional insurance policy.

“If we think of security as an add-on for the rental industry, we’re doing a disservice. People want security baked into the process,” Lane said. “We treat the homeowner like a small business that is in charge of setting the security and expectation for the consumer, and we provide the standardized payment platform that allows them to do that securely, 100 percent of the time.”