Innovating VRBO: Strategies for a Future of Responsible and Immersive Tourist
The Context
The vacation rental market is dynamic and evolving in a world where travellers increasingly seek unique and meaningful experiences. Vrbo, a key player in this market and part of the Expedia Group, faces the dual challenge of competing with giants like Airbnb while innovating to meet new consumer demands and regulatory landscapes. The Strategy Development case study outlines a comprehensive strategy for Vrbo to enhance its market position and future-proof its operations. This article delves into the detailed innovation strategy proposed for Vrbo, emphasising responsible tourism, curated experiences, and technological advancements.
The Challenge
Vision & Aim
Vrbo’s vision is to create a world where every family and group can find a place to call their own, offering unique and memorable stays beyond traditional accommodations. By focusing on entire home rentals, Vrbo aims to provide guests with privacy, space, and the comforts of home, making it an ideal choice for families and groups seeking distinctive travel experiences.
The platform’s commitment to enhancing user experience and integration into Expedia’s extensive network positions Vrbo as a leader in the vacation rental market.
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Challenges
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Over-dependence on Homeowners: Quality control issues arise from reliance on homeowners to maintain standards.
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Regulatory Risks: Varying government policies on short-term rentals threaten stability and growth.
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Market Dynamics: The shift towards experience-based travel over traditional accommodations creates opportunities and competitive pressures.
In the next five years, Vrbo will empower tourists and travellers to find their niche place in any community worldwide by offering immersive vacation experiences with seamless integration between digital platforms and rental properties.
Innovation Intent
The Solution
The Woke Local: Responsible Tourism
Position Vrbo as a company that gives back to the community, fostering a positive impact on local economies and environments. Initiatives such as partnering with local businesses to provide ancillary tourism services, creating opportunities for tourists to volunteer locally and donate to city councils and regional organisations, and sharing VRBO vacation stories can improve relationships with the community, travellers, and VRBO.
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Vacation for the Future: Curated Experiences
Vrbo will cater to travellers’ future needs, focusing on curated and personalised vacation experiences. Strategies include allowing travellers to lock in prices and reserve experiences up to two years in advance, using AI tools to customise vacation experiences based on traveller profiles and preferences, and developing branded experiences and integrating them into listed properties. It can improve lead conversion rates from 3.5% to 4%, resulting in a projected revenue increase of 12.14%, significantly boosting Vrbo’s competitive edge.
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Tech It Up: Enhanced Digital Platforms
Optimise and improve Vrbo’s technological infrastructure to enhance user experience and operational efficiency. Initiatives include Implementing clear and straightforward pricing models, ensuring consistent quality and streamlined check-in processes, and utilising AI to forecast demand, identify trends, and enhance communication between owners and travellers. These initiatives can increase lead conversion rates from 3.5% to 3.9%, resulting in an 11.43% rise in revenue. They can also Improve user satisfaction and loyalty through a more intuitive and responsive platform.