The PhoCusWright Analyst Forum at the Grand Hyatt New York hosted lively discussions on the rising importance of vacation rentals and destination marketing, along with a look into generational divides.
Douglas Quinby, Carroll Rheem & Lorraine Sileo - PhoCusWright Analysts

Douglas Quinby, Carroll Rheem & Lorraine Sileo - PhoCusWright Analysts

Participating in the forum, held on June 9, 2009, were reps from major players in the vacation rental marketplace - including Homeaway Inc. and Endless Vacation Rentals by Wyndham Worldwide. And both Starwood and Hilton.

Amd also destination marketers from across the world - Switzerland, Hungary, and Netherlands, among others.

Douglas Quinby, Senior Director, Research at PhoCusWright, spoke about the challenges and opportunities in the vacation rental sector. He described a market with only 1% dissatisfaction rating among guests, “The myth of ‘SNAD’—significantly not at described—has officially been debunked.”

There’s a rising trend to look upon vacation rentals as a part of the travel industry, as opposed to a real estate investment. But there’s a long way to go – demand is still very seasonal and local, and lack of awareness is the main reason most people don’t consider vacation rentals. Only 27% of vacation rental owners list their properties online. The web accounted for 15% of all vacation rentals in 2008, out of which 25% was booked through an intermediary. Bottomline is that it still mostly works based on personal offline marketing. 

On the positive side, a full two third of vacation rental guests do their research online, and as mentioned above, only a tiny 1% minority had a bad experience.

Lorraine Sileo, PhoCusWright VP, Research, spoke about the Impact of ‘Destination Marketing’ on consumer travel choices. Turns out that the choice of destination is influenced most by search engines (39%), OTAs (36%) and DMO sites (18%). DMO users are younger, more affluent and savvy and active on the web than the average, and 65% consider travel reviews a must-have for DMO sites.

Also, DMO sites are visited equally before and after booking. Couple that with the fact that just over half of DMOs actually offer a booking engine, and you can see that the DMOs are wasting a huge opportunity to influence trip planning.

Carroll Rheem, PhoCusWright Director, Research, provided psychographic measure to help travel leaders predict consumer intentions. She explained that Gen Y travelers have the greatest amount of global wanderlust and Boomers slightly favor traveling off the beaten path.

Younger travelers are more likely to spend more in 2009 and Boomers are more likely to pull back. And the younger set has it’s own peculiar set of characteristics – very little brand loyalty, heavily influenced by social networks, big users of meta-search and travel review websites, and prefer online intermediaries over suppliers for puchasing as well as shopping.

The next PhoCusWright Analyst Forum will be held in September in New York City.

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