CEO Insight: RedAwning on Future of Vacation Rental Distribution

May 17th, 2018

 
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We like RedAwning and its momentum as an aggregator and connectivity partner in the vacation rentals space. Keep an eye on this one, as more channels grab for a piece of the rentals market.
— Luke Bujarski

We recently spoke to RedAwning CEO Tim Choate about his company, their growth and positioning as an aggregator and channel manager in the vacation rentals space. Companies like RedAwning are reducing friction and fast-tracking connectivity between marketplaces and vacation rental inventory. Tim said "we are looking for any partner with lots of loyal customers, and especially with travel-oriented or diverse offerings." Whether United Airlines, Google, Amazon, or Uber could function as platforms for selling vacation rentals remains to be seen. RedAwning will likely be there when and if that happens.

More reasons why we like RedAwning.

Trifecta positioning with the consumer, property manager, and channels. Strong supply aggregation momentum across a massive and fragmented alternative accommodations market. Single largest supplier of vacation homes with 100K plus properties and growing. Adding 1,000 properties per week. 60% supply footprint in Europe. Synergistic relations with the big channels including Airbnb, HomeAway, and Booking.com. Eye on expanding its channel base as witnessed by recent Choice Hotels partnership. Push beyond connectivity into marketing services strengthens position with supplier base.

RedAwning helps fast track connectivity between marketplaces and vacation rental inventory

 
 Marketplaces can connect to vacation rental inventory by 1) Going after owners directly 2) working with property managers 3) working with aggregators e.g. RedAwning to fast track the process.

Marketplaces can connect to vacation rental inventory by 1) Going after owners directly 2) working with property managers 3) working with aggregators e.g. RedAwning to fast track the process.

 

Discussion with Tim Choate, CEO & founder of RedAwning

What’s RedAwning all about?

TC: We began as a b2c play [2010]. Staying at rentals used to be so difficult. A significant portion of people that probably should have been staying at vacation rentals weren't because the friction was so high. It took so much work to find and book a place. So we started with the aim of bringing a hotel-like experience to the market. 

Who do you consider your core customer?

TC: We view ourselves as having three clients: The traveler which is where we began. We want them to have a consistent hotel-like experience. Our second client is the property manager and the third customer are the channels who we see more as partners. We're large enough that we meet with every one of the big channels at a pretty high level every quarter where we talk about what's working for us and what's working for them. 

We were the first large-scale guys doing what people now call “instant booking” because that’s all we did. Our model is 100% instant booking.
— Tim Choate, CEO RedAwning

TC: We were the first large-scale guys doing what people now call “instant booking” because that's all we did. Our model is 100% instant booking. That's really where we began. Originally we worked with owners exclusively. We quickly moved to acquiring inventory via property managers who said hey, I have one-hundred properties. Can I work with you? This helped us to scale our inventory much faster.

What do you do for property managers?

TC: We essentially help property managers survive and thrive. Most property managers are not large enough to have a full-time marketing person and a full-time tech person on staff and that’s what it takes these days. We help our property managers get access to all of the main [consumer] channels and we're growing new channels for them. 

What do you do for the OTAs?

TC: We were the original launch partner for HomeAway when they transitioned to online bookings. We did the same for TripAdvisor. We've also been Airbnb's largest client for five or six years and we're Booking.com’s largest client in the US. I think we're still Expedia's largest client so we were in early.

We also originated the concept of channel management for vacation rentals. That didn’t really exist before and for us it wasn’t really channel management. It was just marketing.

TC: We also originated the concept of channel management for vacation rentals. That didn't really exist before and for us it wasn't really channel management. It was just marketing. We had very attractive supply but we knew it was really hard to get traffic so we partnered with those that had the traffic. And then that developed into full-scale partnerships with everyone.

You also sell direct to consumer correct?

TC: Yeah we keep expanding on that we have a new consumer app so they get their driving directions, their check-in instructions, we’ll eventually have activities we’ll eventually have concierge. In every way possible we try to mirror a hotel stay. We see ourselves in the hotel world as kind of a soft brand, where we work with local property managers that each have their own brand, but we bring the collection together under RedAwning so the consumer knows hey, I'm going to have these types of consistencies every time I book.

You recently acquired Blizzard Marketing.

TC: The idea with Blizzard was really that we wanted to expand what we do for each property manager. The idea is that hey, we're doing all of your marketing and distribution, why don't we also help you with your own website. We'll shortly have kind of two website models. One of which will be what we call the ala carte model which is really the Blizzard model and one which will be a more complete full-service model that integrates with everything that RedAwning does. So really in every way possible we're trying to grow a relationship with each property manager.

How are you growing your supply?

TC: No one really knows how many vacation rental properties exist in the world [jokingly]. I've seen estimates range from 5 to 10 million properties globally so that's a lot more than what we've got [100K+ properties with 60% in Europe]. It’s a very fragmented space. A recent report pointed to over 100,000 property management companies out there. We have many of them but there are many, many thousands more. That's our primary focus now adding property managers. Our goal is to sign at least one-thousand properties per week and we're usually signing at least  that per week.

Somewhere over 50% of vacation rental properties are self-managed. Which means there are five million plus self-managed properties out there and we need to figure out how to get to that audience.

TC: We also have an owner program and are testing new models. It’s much harder to work with individual owners, so we're much, much smaller there - but long tail is substantial. I believe that somewhere over 50% of vacation rental properties are self-managed. Which means there are five million plus self-managed properties out there and we need to figure out how to get to that audience. We're working on various strategies in the owners category but that's more long-term. I would say that for quite a while the focus will remain on property managers.

Is Google good or bad for RedAwning?

TC: I think Google is good for RedAwning. I do believe that the stories are true that the Google Hotel Ads product will eventually include vacation rentals. Since we are the single largest supplier of vacation rentals to everyone else, it makes sense that we would be part of that. I don't think anyone knows when that will happen. I'm not sure that Google knows exactly when that will happen. But we know the people in that category and we've been talking to them for some time so when the time is right our desire is to be a part of that.

Since we are the single largest supplier of vacation rentals to everyone else, it makes sense that we would be part of that.

TC: So yeah Google in the vacation rental space would be great for us, but that doesn't mean that individual owners will suddenly figure out how to connect themselves up to Google. I think Google poses a risk to the OTAs but what we do is we aggregate content. That's why we're large with all of the OTAs and that's why we would also be large for Google.  

How are you working with Amazon?

TC: It's somewhat known that we're a pretty close partner with Amazon. We’re one of the leading users of what they call Amazon Connect which is their phone automation system and of course our websites are on AWS just like everybody else’s. Our phones are currently answered by Scarlet [white label virtual assistant] she helps expedite our customers’ most common questions and actually deals with them directly. Amazon tried hotel marketing a couple years ago and they pulled back on that but if you think about Amazon Prime and its size, there I would be very surprised if they don't retry things in the space eventually. We try to have conversations with all of the big ten consumer brands about all those things so we would actually be a part of that when it happens. 

Amazon tried hotel marketing a couple years ago and they pulled back on that but if you think Amazon Prime and the size there I would be very surprised if they don’t retry things in the space eventually.

TC: I've had three calls in the last couple of weeks with Amazon. There's a whole lot of stuff that we're working on around these different areas. There will be some interesting things to come I don't think there will be any sudden move back into lodging because they already tried that, but I think eventually they will do something. I would watch the news not around distribution but some other interesting things that are going to come out and we're part of them so that's why we can't talk about them, but alluding to something that you already mentioned before, which is Amazon and its connection to homes. Since we are the single largest supplier we get to have a lot of interesting conversations some of these things may not come to pass but having the conversations is fun.


Access our Insights. Catch up on our recent analysis on Amazon's in-roads into the home sharing & services ecosystem.