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A podcast for Casago homeowners by the Partners of Casago. Learn about our programs, market updates, and the local heroes in your market.
Hey, welcome to Keynotes.
My name's Steve Schwab.
I'm here today with Tim Rosolio,
the VP of Vacation Rental
Partnerships at the Expedia Group.
Tim, welcome to the show.
Great to see you, Steve.
Always a pleasure.
Steve always gives me a new idea, and
it's typically something about how we
drive more quality and consistency and
performance in vacation rentals, which
is, like, my favorite thing to talk about.
So, good to see you.
You know, I'm always so appreciative
of the conversations I get to
have with you and Larry and a
lot of the team that, of yours.
You're always looking for partnership,
and especially in the transition we've
been having over this past year, I
can't tell you how refreshing it's been
to be able to work with the Expedia
Group and VRBO in this transition.
You've been real partners in the entire
experience, and thank you for that.
Yeah, I mean, well, and thank you
for the continued collaboration.
We recognize our partners
are our customers too.
There's only so many great houses on
the beach, and there's only so many
great houses on the ski mountain,
and perhaps more importantly,
there's only so many operators.
So when we can find partners that
have those houses and know how to do
it right, it is extremely important
that we make it a two-way dialogue.
Yeah, it's obvious in the way that
you and your entire team treat us.
You know, something that I've always
found fascinating about you is you're
not just on one side of this equation.
Not only are you the VP of Vacational
Partnerships for Expedia and VRBO,
but you're also a host yourself-
Yeah ... and I think that the big
difference in how you see the world.
Maybe you could tell me
a little bit about that.
Yeah, it's funny.
It's great to participate in the joy of
having a vacation rental for, you know,
all the reasons that we know it's great.
You make some money, it's an appreciating
asset, and you get to use it yourself.
So that's all great, but I would
say that the- Best thing for me is
just how much I've learned by doing.
To a certain extent, in order to
understand my property manager
partners, you need to understand
how do you do a good turnover?
Or what are the tools that would
help you do that good turnover?
Or how do you handle challenging guests?
Or what are the things that you
need to do to continue to drive
the reoccurring performance?
It's really the number one reason I
still do it, is because I learn so
much, and I understand the tools.
It's been a really cool experience, and
certainly gives me a great appreciation
for what property managers do.
I always felt like if you haven't
been there, it's hard to judge what's
happening on the outside, right?
So having that firsthand experience, it
plays well to our franchise model that,
you know, those who are actually on the
ground know what's really happening,
bringing it back to leadership.
There's a lot of noise going on right
now in the industry, so just to break
it down, what are you really building
across the marketplace right now?
Yeah.
I, I think a lot of people understand
that we've been really changing our
technology stack over the past few years.
We certainly did some one step
back to hopefully take three
or four steps forward, and we
see it happening right now.
People traditionally have, of course,
just thought of Vrbo as Vrbo, and all
of this work we've done has enabled us
to expose a lot more of our inventory to
really the depth and breadth of Expedia
demand, which includes Expedia, which
is going exceptionally well, and the
B2B network, which is, I think, the next
frontier that's gonna be really exciting.
Many people probably saw that we're
gonna be powering hotel supply for
Uber, and we're gonna be powering
vacation rental supply for Uber later
this year, and that's just the tip
of the iceberg of the things that
we're gonna be able to do with B2B.
That's the first thing,
the Expedia demand.
Everything that is within that network
The second thing is capabilities.
So traditionally, uh, within
the hotel world, there's been a
extremely robust set of promotional
tools that partners could use.
In the old world, we would've
needed to rebuild all that for Vrbo.
Based upon the fact that we were
able to be on one similar common
tech stack, that was a lot easier,
and many of our partners, they're
exposed to those promotions, and have
really had a lot of success with it,
which we're extremely excited about.
And then the third thing that
I think is going on in the
industry is focus on quality.
Every study that we do indicates the
challenge that travelers have with
vacation rentals is just all the anxiety
about, like, is this all gonna work out?
So all these things that
you don't necessarily have
to worry about with hotels.
It's, am I gonna get
canceled on last minute?
Is the place gonna look like
it does in the pictures?
What's my correspondence and
communication gonna be with,
the partner gonna look like?
And because of that, we've
really had a pretty dramatic
pivot to focusing on quality.
And because of that, like, that's
why I don't talk much about the
count of properties that we have.
The key metric in my mind is, like,
how do I, while having compelling
amount of selection, how am I
delivering consistent experiences?
Because those consistent experiences
are gonna be good for us, and they're
gonna be good for our industry, and it's
gonna keep the travelers coming back.
So that's really where our head is.
It's Expedia demand, new
capabilities, and it's trust.
Yeah.
You know, you and I have said this
before, but trustability is bookability.
It's a trust transaction, right?
They're putting their money down for
something that they haven't seen in real
life, and have to have faith that both
the channel, the Vrbo, and the host are
going to live up to what's been promised.
That's right, and I think during the
pandemic there was a lot of supply
and a lot of operators that came
on the market that didn't get it.
And I think what you're seeing now with
all that supply in the market is there is
a flight to quality, and the partners, I
mean, I see it in the data, the partners
that deliver the consistent experiences
are the ones that are growing and winning.
What kind of shift are you
seeing to quality, and over
the past, say, two years?
As you're seeing those who are providing
quality stays, consistent service
winning, are you seeing a larger
percentage of the industry shifting
that direction, or is it those who
are doing that are just winning more?
I'd say it's probably
a little bit of both.
The ones that are doing that
are certainly winning more.
We changed our premier partner
program to be a little bit more
focused on quality, and those partners
are getting more of the bookings.
Mm-hmm.
We also are being much more discreet
about good, bad, and ugly surrounding
partners, so like on our property details
pages you can see the cancellation rate.
So just based upon that, you're
seeing a change in mix shift.
And then I also think just in
the industry, if you look at...
Listen, there's constantly companies
that are thriving, and there's also
companies that frankly are going out
of business, or individual owners
that are selling to go to long-term.
Or a, a happy path for all of us
is individual owner that realizes
it's hard and says, "I'm gonna sign
up for my local Costago franchise."
Like, you're seeing people that can't
deliver the goods blow out of the
marketplace because it's just not a
profitable endeavor for them anymore.
Sure.
Yeah, it's really changed, hasn't it?
I do think that when people talk
about the supply that's happened, it
doesn't really affect that top 20%.
That top 20% is insulated by the service,
by the quality of the property, by
the demand that they're generating.
There could be four times as much
inventory, they're gonna have the same
sort of bookings because they're not
competing in that red ocean, right?
They're driving demand by the fact
of who they are and what they've, are
providing at that, and I think that's
making the difference right now.
They have trust signals, right?
Yeah.
I mean, so you have a lot of inventory
within the Costago network that has
a gazillion five-star reviews, but
then beyond that what's cool is when
a franchise reaches out to try to
sign up a new owner, you can tell a
story of, "You're gonna get off to a
fast start because we know what we're
doing, and we have the halo effect of
Costago's one of the best in the biz.
We have a playbook to
make you successful."
So I think it's a variety of trust
signals, and it's a trust signal that-
If you're with the right property
manager, very good things can happen.
And as the right property manager is
picking the right homeowner partners.
Yeah.
More so than ever these days because, you
know, I think you and I have probably had
interesting dialogues before about some
of these homes or some of these owners,
it's actually just not worth it, right?
If you want your brand to stand
for something, then you need that
homeowner too to be on the bus
about delivering a great experience.
When those owners aren't keeping their
calendars up to date, and that's causing
cancellations for you, that's a problem.
If that homeowner is totally
reluctant to refresh a tired
home, that's also bad for you.
So I don't know how much work you're
doing on what we refer to as the purge.
You probably should be.
The homeowner's the product owner,
we're the service provider, and VRBO
is the marketplace, and if there
isn't alignment across those three
players, the ecosystem struggles.
So let's talk a little
bit about Vrbo Care.
There's a lot of operators that hear
standards and think about friction.
Where are they getting it wrong?
I mean, the places they're
getting it wrong are...
I mean, the most obvious
one's a cancellation.
Gotta, gotta have your rates
and calendars up to date.
The second one probably is what we
call, it's, it's SNAD, S-N-A-D, which
is significantly not as described.
So that's- SNAD ... picture doesn't equal
what you actually see when you get there.
Probably the most painful
one is denied entry.
Mm-hmm.
That is, that's actually
worse than a cancellation.
That's when the traveler gets to
the lockbox, they can't get in,
they can't contact anybody, and
then they sleep on the porch.
That sounds awesome, doesn't it, Schwabe?
Um, you know, there's a variety of
ways that this thing can go wrong.
We really say, like, "If something
bad happens, we got you."
Yeah.
And it's b- it's my vision with Vrbo
Care that we, if something goes wrong,
we have your back, we delight you-
And actually what we find is when
that happens to a traveler, they keep
coming back to Vrbo despite the fact
that they had this bad experience.
It is a demonstration that Vrbo
Care is heading in the right
direction, so we're excited about it.
And you guys are really looking with
Vrbo Care at, like, booking protection,
property accuracy, the safety and
assistance, like you're on 24/7, and
then protection against fraud, and
then timeline support too, right?
All of those things are included.
We have a dedicated team of our very
best agents that help you find the next
place, and we'll find you a place that
is at least as good as the place you
wanted initially, and in some cases a
place that's actually quite a bit better.
Now, we all know that in Maui
on the 4th of July it's gonna
be a little harder to find that.
So sometimes we might need to put you
into a hotel for a night, and then we'll
get you to the great vacation rental.
But I think the results we've seen
indicate we're doing what we want here.
We're creating a sort
of stickier experience.
A hotel for the night is better than
a front porch for the night that
you talked about earlier, right?
Yeah.
Yeah, yeah, yeah.
And by being part of Expedia, we have
access to some pretty nice hotels.
How does the quality directly
affect the algorithms of Vrbo?
Like, when we're thinking about that,
what are the signals as a property
manager, as a homeowner, I should
be thinking about, like here's the
quality signals that I need to make
sure that I'm hitting every single time
that's going to either make me a hero
or a zero in the algorithms of Vrbo?
I mean, the main ones are going
to be acceptance rate for people
that are on booking requests,
cancellation rate, and then reviews.
Now, the way I would say that in
terms of the algorithm is we show
all of that stuff to the traveler.
If you're good at all that stuff,
you get specific badges, like from
your partner and loved by guest.
If you're not so good at those, we also
show that too, and all of that drives
conversion, and everyone knows that
sort is largely driven by conversion.
So properties that within that price
class that if you always book, it's in
our best interest to put you in spot one.
Revenue per visit, right?
Is a big factor.
That's sort of the name
of the game for us.
I mean, what we're doing is we're spending
money on marketing to bring people to
the site, and we make money when there's
bookings and we don't when people
aren't pleased with what they found.
So it's a conversion based sort.
Yeah, quality signals drive conversion.
And then, you know, another thing worth
mentioning is I think we're getting
smarter about trying to understand
lifetime value of the traveler.
Because if we can...
Like, say for example one way or
another there was a totally new
property where one way or another it
was gonna convert well, but we were
really worried about the experience.
That's probably not one that
we want at the top of sort.
We wanna understand what's the very
best new property that we're not
worried about, somebody who's updated
their pricing, has their calendar up
to date, their calendar's cross-listed
across the other platforms to make sure
that they don't get a double booking.
And when we have that
confidence, has all...
Not only are we driving conversion,
but ideally we're really driving
customer lifetime value, which is
even better for us because that way
we don't need to reacquire them via
Google or via our ads They hopefully,
actually during the experience, they
download the Vrbo app, and the next
time they wanna go on vacation, they
come right to the app and book again.
If Vrbo's concerned about revenue per
visit, because that's the business model,
how do I as a homeowner say, "Okay, I'm
going to make the highest revenue per
visit for Vrbo possible so that I just
kill it, and I'm ranked well, and my own
business, and my own property does well?"
Like, what should I be thinking
about as a property owner?
The three metrics I talked
about, very basics of acceptance
rate, honor rate, reviews.
Then, you know, a lot of our Premier
partners, they deliver the goods in
terms of hospitality, and you and
I have talked about this before.
Like, you are always reaching
out and saying like, "Tell
me what this trip's for."
And like I don't know, maybe you find out
it's for somebody's birthday, and because
it's for somebody's birthday you're gonna
s- set out that perfect welcome gift.
Driving those emotive feelings makes
very good things happen for all of us,
so it just comes down to hospitality
in my mind, to the extent that the
economics work well for everybody.
If it works for you, hiring an
exceptional professional property manager.
Maybe there's things I need to
make sure the property itself has.
Do the colors matter?
I've got this home and I just
really want to convert well.
Yeah.
Volume of photos, you know, you wanna make
sure you have a picture of every bedroom.
I think that there's also specific
amenities that are very important.
Some of them are, are, I would
say in the category of things
that you already have, like Wi-Fi.
Well, make sure that it's
disclosed that you have Wi-Fi.
Make sure you check the box.
Then there's the other end of the spectrum
of expensive, big things that we know
convert: pools, hot tubs, fireplaces.
Like, we know that that
is a total differentiator.
But then also there's this
sort of this hospitality piece
that is really important.
A really great property manager
once told me, "Everything anybody
touches needs to be of quality."
So if you have lousy towels- For
the love of God, get some new ones.
Another good one is, uh, the
appliances in the kitchen.
Like, we ran this test once that
we started showing high quality
appliances in the kitchen that
were all, like, KitchenAid or a,
a better brand, not the whatever
that you get at Target or Walmart.
Like, a nice mixer from KitchenAid, and
all of the appliances were all KitchenAid.
Like, it was a significant conversion pop.
Really?
So there's lots of small things
that you can buy that can be quite
powerful for conversion and are a lot
cheaper than a pool in your backyard.
Yeah.
It's the haptics of luxury or the
haptics of hospitality, right?
Like, when you pick up something and it
feels solid or luxurious, or when you
see something that feels like it's not
just what you see, but how it feels.
Like the glass bottles or the,
the KitchenAid appliances,
it signals a different level
of maybe care by the owner.
So the guest thinks they must have
pride in ownership of this property.
It must be a good stay, right?
And they give a you-know-what-
Yeah ... about hospitality.
Yeah.
Like, I don't know.
Think of, like, silverware.
There's a whole gamut of silverware.
You should probably get...
I mean, you don't need to get, you
don't need to get, like, super expensive
china, but you know, get some nice forks.
Yeah.
Get the k- get the KitchenAid mixer.
Get some nice towels.
Like, it really matters.
You can feel it when you have that
cheap fork in your hand, can't you?
I mean, it just- 100%.
Yeah.
It feels like a downgrade.
Oh, you know what's another
good one, is beach chairs.
Like, rather than janky beach chairs,
have some nice sturdy beach chairs.
It's interesting the psychology
that goes along with it, right?
Yeah.
When you're thinking about distribution
and how it's shifted, what should
operators be thinking about the shift in
distribution, especially with everything
happening in the world right now?
I mean, at Expedia Group, the
way we're thinking about it
is multiple legs of the stool.
So s- you know, Vrbo is gonna be-
For your very traditional, very
often drive-to vacation family.
I think Expedia is going to be for, you
know, you're gonna access a really broad
network of travelers, many of which is...
It's probably just a little more diverse.
Like, they have families, but they also
have couples, and singles, and people
that are interested in going on vacation.
So probably gonna book a little bit
more of your one and two-bedroom
units on Expedia, and we've
had some success with that.
And again, some great things are coming,
like within Expedia, they're known as
the one-stop shop, so we're gonna enable
people to book their flight with their
vacation rental on a package rate,
and that's gonna come later this year.
And then B2B, I would think of
that as like what very often
is hard-to-reach audiences.
So there are great travelers that
work with Chase or American Express.
Like, these are, these are partners that
Expedia Group has B2B relationships with.
The most recent one is Uber.
And then also that sort of expands
globally, so you know, we will
distribute to banking institutions,
and airlines, and even OTAs that
really operate in other countries.
And you can imagine if somebody
books an American vacation rental on
Traveloka, which is a Indonesian OTA,
well, if you're flying all the way to
America, you're probably prepared to
stay for a while and spend some money.
So I think there's an opportunity
for the hard-to-reach audiences,
and that's so much, that's so much
more than what Vrbo used to be.
Now, obviously also now, with everything
that's going on in the world, we're
certainly seeing a bit more of a flight
to domestic, but if you re- recall even
during the pandemic, that actually was,
despite the global tragedy, kind of a good
thing for the vacation rental industry.
Like, once everybody calmed down,
everybody was like, "I still wanna go
down, go to vacation at the beach."
Yeah.
And that quick drive-to
trip was good for all of us.
The industry did really well, it's
just what part or what destinations
in the industry shifted, right?
Yeah.
Like, the international
destination's not so great.
The drive-to mountain
destinations killed it.
Absolutely.
Right?
So the Southeast killed it.
Hawaii was rough- Yeah ... for the exact
reasons that you'd think, you know?
So yeah, it was pretty wild times, huh?
I remember from my VR, like I'd
have like a Monday and Tuesday
night open, and it would get booked
at rack rates, and I'm like, "Hmm,
this isn't gonna last forever."
Take it while you can.
Yeah.
With the AI noise going on right
now, and everybody talking about
it, from where do you sit, what's
real and what's just noise?
We have implemented a variety
of things that have been
really successful with the AI.
The very first thing that we did
several years ago really was,
it's largely in the service space,
chatbots, like how do I service things?
Really easily and really efficiently.
Then sort of the second layer
that we really leaned into is
within the, really the shopping
experience, where we have property
Q&A that's automatically generated.
We have review summaries for people
that don't wanna read 300 reviews.
It's just, "Here's the summary of what
you need to know from the reviews."
We are, later this year, coming out
with natural language search so that
we're sort of taking away some of
that structured way that people would
say, "I'm looking for three bedrooms
in this market for these dates."
And people are gonna be able
to type in whatever they want.
They say that they want, um, pet-friendly.
They can say that they want near the X,
Y, or Z, and that's gonna really, I think,
transform some of the shopping experience.
I think that's really interesting.
When you start to decouple the structure
of what's traditionally been the queries
for search, and now plug that into a
natural, you know, a natural language
search, how should property managers
and homeowners be thinking about the
restructuring of the data that we're
gonna give to you to make sure that we're
found in the top of the engines, right?
Top of the search.
I don't think you're gonna need to
do anything all that much different,
other than make sure that you
have a really strong description
as well- Yeah ... because that
will feed into the search process.
And for what it's worth, like, natural
language search is going to be optional.
Many of our joint travelers are of a
certain age and certain demographic
that I think they're gonna be
perfectly comfortable doing what
they've been doing for years, but
we are gonna have the option for
natural language search as well.
Adoption a little slower than technology.
For certain cohorts, I think that's right.
Fair enough.
What do you think the impact
of AI is going to be on the
short-term rental industry as a
whole over the next five years?
I think the big thing is actually going
to be, it's not gonna be the service
thing, it's not gonna be purely just
the website thing, it's going to be
where are people going to shop and to...
You know, as you can imagine, we are
trying to be at the very cutting edge
of that via our partnerships with
Perplexity and all the other major AR
pl- uh, AI players to make sure that
as people, over time, likely shift
from a traditional Google search to an
AI-based search, that Vrbo properties
are extremely prominent in that space.
Still a small base, but it's, it's
growing what percentage of the
traffic's flowing through there.
So it's, it's critical that if you
wanna book, you're really focused there.
So as a full disclosure, I ordered
my first humanoid robot, the Neo1 X.
That ma- that would make sense that
you're on the cutting edge of this, Dan.
I'm trying to get them to deliver it early
so I can put it into one of our vacation
rentals and have it clean in between
stays, and, and in the evenings with a
disclosure to the guest of getting to try
AI housekeeping for the first time ever.
There's a certain demographic that's
gonna think that's awesome, and
there's a certain demographic that's
going to find that not awesome.
Totally for fun to see what
happened, and we were gonna have...
I was thinking about it, there's
gonna have to be a lot of disclosure
because now AI is not only knowing
what you booked and when you booked
it, but it's gonna know, like, that
you left your plates out, right?
Yeah.
Right.
God forbid something else, right?
So, or whatever that might be.
We'll keep it PG, but you and I have
been in this industry for a while,
and, you know, we've seen things.
We've all got stories.
We've all got the stories, and a little
bit of trauma to go along with it.
Yeah.
What do you think is working right now
that you feel confident in, and what
is Vrbo still trying to figure out?
You know, I think promotions are,
have been an absolute home run.
That's something we're
super excited about.
I think that the quality stuff and
the Vrbo care stuff is heading in
the right direction, but there's
an opportunity for so much more.
Like, how can we truly eradicate
the bad experiences, and how can
we be even more above and beyond
when those experiences happen?
I think that there is an opportunity
for us to provide additional
levers for property managers.
For example, later this year we're
gonna Charbre and Sponsored Listings,
which I believe Casago and Vacasa have
been doing some of the pilots with,
and the results are pretty promising.
So we are super eager to start to
have that lever so that when there are
partners that say, "I'm doing all the
things you ask in terms of promotions,
I know that I deliver quality.
What's the one thing I can do that truly
will guarantee me more visibility?"
We can say, "Well, like we got this
product," and I think that we're
all really excited about that.
We're kinda wrapping down here.
Let me ask you a question of, what do you
think the operators are missing today?
Where are operators misunderstanding
the system and making them underperform
to what they could be doing?
You know, what I would say, like you're
not an example of this, but there's
definitely certain property managers
that I think that OTAs are the big bad
wolf, and that everything should be
moving towards the book direct movement.
But, and obviously I'm biased, but
like the way I think of it is we are
not just providing you a traveler,
we are adding a traveler to your CRM.
I'm gonna remarket to that traveler too.
Sure.
But if they, if they have a great
experience and you do a nice job of
disclosing the, the brand that you offer,
like you should remarket to them too.
You know, all the OTAs over time sort of
handhold and give you less information,
like right at your fingertips,
and that's for obvious reasons.
But you have your own ways
of getting that information.
Yeah.
And I would think about it as, if I do
an exceptional job, this is not just a
traveler once, but it's an opportunity
to bring a traveler back again and again.
Sometimes that traveler will come
back via an OTA, sometimes they'll
come back via direct, and I kind of
view that as part of the partnership.
Make no mistake, I wish all the bookings
came back through me, but- Sure ... at
the same time, if property managers have
their ways of getting contact information
and doing direct marketing, like
that's kind of part of the deal for me.
Tim, one last question.
It's the exact opposite of
everything we've talked about.
What's the number one way
for an operator to lose their
rankings and position on Vrbo?
Cancellation, especially
if it's last minute.
Okay, good to know.
Tim, thanks so much for coming on.
I appreciate the time with you always.
Looking forward to hanging out with you
again at all the different conferences,
and maybe playing some golf soon.
Sounds like a plan.
Pleasure to see you, my man.