The OVO Network team is often asked by chalet owners about marketing properties on the large US-based publicly quoted marketing platforms, generally known as OTAs (Online Travel Agents). The big three companies in this industry are generally recognised as Airbnb, VRBO (used to be called HomeAway and now part of Expedia) and Booking.com (in Europe).
OVO Network itself has a very diverse, risk-attenuated marketing strategy and uses multiple OTA channels but also has an enviable industry reputation of driving a high percentage of direct business. In this article, we have chosen the largest, Airbnb, to explain, compare and contrast OVO Network’s reasons for adopting a selective partnership approach with these global businesses.
Is listing your rental chalet on these three major platforms synonymous with success of your business? The short answer is no, at least not necessarily. It should be part of a larger strategy. If you wish to get the best performance out of your rental chalet, book a call with the experts at OVO Network, leading chalet rental platform in the Alps.
OVO Network is a top Airbnb Partner
Even in the early days, OVO Network recognised that Airbnb should form part of an owner’s marketing strategy. In fact, OVO Network is an Airbnb “SuperHost” which as a company is hard to achieve and also gives OVO Network a search ranking edge on Airbnb. OVO Network has also been recognised as a top performer by Airbnb, even if it only accounts for a small fraction of its sales. This is a quote from the French account manager for OVO Network:
“OVO Network is considered by Airbnb to be one of its best professional hosts in France, and has been since the beginning of the collaboration in 2016. OVO Network has had “Superhost” status for several years, an Airbnb certification of quality for travellers wishing to book and proof of great professionalism in the management of reservations.
The work of the teams is remarkable, they have been able to adapt to the latest travel trends and technological developments allowing listings to be visible on the platform.”
Your listing on Airbnb by OVO Network
All our “Complete” package owners will find their properties on Airbnb and are easily bookable. This of course begs the question, why would any person or company do anything else to book their properties, other than list it on Airbnb alone or perhaps the other OTAs too? Why does Airbnb not generate many more bookings in this region of France when all properties are available? There are many reasons to be circumspect in this fast-changing environment and to understand how large corporate businesses work in a hyper-local, hospitality-based industry.
The following are our reasons, all derived from our experience of dealing with these businesses over the years, keeping abreast of all the changes they implement and ensuring a significantly reduced risk to our owner’s income but still leveraging opportunities.
OVO Network distributes, automatically its owner’s properties to the big OTAs, keeping calendars, content, photographs and pricing up to date minute by minute as OVO Network is a long-time Superhost benefitting from preferential ranking as it has accrued many great reviews.
However, despite all these plus’s, Airbnb only generates a small percentage of all bookings for the OVO Network portfolio! This is not seen as unfavourable but more a positive note by OVO Network as it keeps risks of business continuity to a minimum but increases exposure.
French alpine chalets are not the core business of Airbnb or other OTAs; they do not fit many of the volume booking metric targets needed by a company with 5.6m properties. The following 11 points explain in much more detail the ecosystem of OTAs, their role in guest and owner marketing and insights on booking controls and money management.
In an ideal OTA world, guests would be offered a great price, excellent accommodation, free cancellation and frictionless booking. This approach, however, is not possible, without completely discounting an owner’s business needs and the practicalities of operations and the numerous external factors.
All OTAs are guest-centric. Once a sufficient level of inventory has been established, the OTA must book the accommodation and this means focussing on the guest and ensuring their demands are met.
The supply side becomes secondary once critical mass is achieved per region and accommodation is increasingly ranked according to price, availability, cancellation terms, quality and of course, reviews. This is best achieved through targeting the volume, all year-round markets that convert better, such as cities with more transient holiday and business travellers.
OVO Network represents a quality collection of properties from responsible owners in a niche market and has their best interests at heart. We make strenuous efforts to match guests to properties within the confines of reasonable business terms with an excellent value proposition to both guest and owner. The OVO Network approach is quality, not quantity.
Pressure is applied and continues to be applied to owners to adopt less onerous cancellation terms and shorter stays. This has been happening across OTAs for years but is very hard to implement in the rental world. In contrast, hotels find this easier as they only sell fractional accommodation and generally shorter stays. The pressure continues to be applied, however.
OVO Network focuses its marketing efforts on the guest demographic which can accommodate the owner’s necessary cancellation terms and appreciate the reasons why these are in place.
Airbnb is quoting 103.7m “nights & experiences” booked in the second three months (2nd Qtr) of 2022, which is 18 nights per property (but includes experiences), so we could estimate 15% occupancy in this period and slightly less for the 1st quarter of 2022. According to Airbnb, when looking at all of 2021, new data shows the typical US Airbnb Host’s income rose to over $13,800. This is the volume accommodation booking sector Airbnb targets.
As an example, La Clusaz has 795 properties for rental, and almost 70% have 2 bedrooms or less (Source AirDNA). This volume of lower-value accommodation fits a booking commodity approach.
OVO Network’s average occupancy for the first six months of 2022 is 58% using a multi-marketing approach and is reflective of focused marketing efforts outside of Airbnb and other OTAs. The average income is also considerably higher, reflecting our guest and property type, marketing and quality focus within a much narrower spectrum of potential guests rather than a trawl net approach.
Airbnb and the other OTAs have a global standardised data approach to all inventory, which precludes a lot of information that guests require. Listing 5m+ properties with a wide variety of amenities and nomenclatures and location opportunities and activities is simply not feasible and would produce an inconsistent and complicated booking journey on Airbnb. The data connection is therefore standardised with a focus on pictures and prices and supported by previous reviews and easy cancellation terms.
This means guests cannot see the levels of information they often require on these OTAs, which often make strenuous efforts to hide details of properties and owners’ contact information, which, even if available, are moderated.
Guests, especially with families, often want more information, may wish to request a hold on a potential booking for 24 hours, plus feel comfortable with the property owner and/or management business. There is increasingly a great deal of concern that what a guest sees on an OTA may not represent what they book. We are witnessing a great deal of press around this concern and a push toward registration, licensing and quality standards globally. Humans have the best weather vane of trust when in contact with each other, which is impossible in a full e-commerce environment.
Independent owners frequently attempt to counter OTA search dominance and communication blocks by creating their websites, but getting ranked and creating a converting payment and trustworthy platform is extremely difficult and takes years to establish.
OVO Network has built a bespoke technical solution and a reputation for offering up a wealth of information and facilities not available through an OTA for both property and location, all targeted at the guest demographic. OVO Network’s portfolio is enviable in its quality and reviews, avoiding platform brand concern from those guests who have had poor experiences using Airbnb.
OVO Network’s web platform has hundreds of Google first page and first place keywords, high levels of traffic and converts exceptionally well. This has been and continues to be a substantial investment but easily outperforms all OTAs on bookings and de-risks our owners’ businesses.
Different nationalities often have other preferences on how they book and pay, especially in central Europe, where direct, non-card payments are often preferred. OTAs expect card payments and often charge extra for this.
OVO Network offers a multitude of payment methods, and guests can have an open dialogue if needed as well.
Complaints: A largely unknown fact to guests is that Airbnb is an agency that actually pays no part in the legality of the booking process and has many disclaimers on liabilities related to guests or owners. Airbnb does, however, act as an intermediary for accommodation complaints. Airbnb is guest-centric and, therefore, has a natural inclination to support the complainant rather than the accommodation provider. With high guest demand reputation is of paramount importance to maintaining booking traction. Airbnb losing properties in an oversupplied market is inconsequential; losing a customer who may return year after year and influence friends and family is a poor e-commerce policy.
Dealing with guest complaints is a science and requires experience and record management for evidentiary purposes. Even then, there are no guarantees.
Airbnb introduced an “AirCover” policy for hosts, which was recently extended to guests too. The web page explaining the cover is supported by T&Cs and is worth reading as it details the actual cover. The bookings made via Airbnb through OVO Networks channel management provide this cover, of course, but any booking with a subsequent complaint may fall under the Airbnb dispute resolution process, a remote and web-based service.
OVO Network has a lot of experience in dealing with guest complaints and the occasional damage caused, but even with concrete evidence, we have seen rulings against owners by OTAs. OVO Network is, therefore, naturally cautious in dealing with large impersonal businesses that have an imbalance of responsibility. OVO Network direct website bookings and owner-direct payments allow complaints to be moderated on a level playing field by all parties involved, and OVO Network always has its owners’ business at the forefront of its collective mind!
Cash Control: Despite Airbnb legally disavowing any liability or responsibility for a booking, it has, to a degree, shown where its loyalties lie, with the full refund of all guests in the early days of Covid instead of being more creative and supporting their co-founders: the owners of homes.
Control of booking monies, moderated communication, and complaint handling means there is always risk associated with an Airbnb booking of a reduced payment or no payment for a booking.
Delisting: This can be a disaster for those who rely on the booking income from an OTA alone. There appear to be a substantial number of owners who have been delisted for no reason or fake or dishonest reasons and damaging portrayals by guests. Guest-centric businesses with millions of properties are without an individual focus and are subject to automated systems and an impersonal approach that cannot address this very damaging situation.
OVO Network’s distribution approach means that even if a property were subject to delisting for any reason, it would not damage the owner’s business.
OVO Network is also of a size that allows it to have account managers with these larger companies, and this grants personal touch points should difficulties arise.
OVO Network also works at a personal level with its owners and has significant experience with guests, both challenging and wonderful! This liaison allows us to mitigate issues, pour water on troubled waters, navigate any challenges in concert with the owners and support them at all times.
It is essential to understand that despite its need for Hosts and properties, Airbnb is guest-centric, generating demand and hence bookings are its lifeblood. Once a destination has supply that outstrips demand, this balance becomes even more critical as Hosts need to discount to get occupancy without a complex and distributed marketing plan. Airbnb will then naturally promote the “best value” properties to improve its income and reputation as value for money.
Overcharging guests: As of the time of writing, Airbnb (unlike VRBO) charges all guests a “Tourist Tax” fee at the time of booking according to their T&C’s.
This should only be charged to adults over 18 years of age, not children. This needs to be made apparent on Airbnb, but with some investigation, we note Airbnb also charges for children. Airbnb suggests that a guest should apply to reclaim the fees from the local French authorities.
With a large group of children, this could end up being 00’s of Euro’s more and claiming money back from the local offices could be slightly challenging administratively!
OVO Network calculates and charges the correct amount to all guests.
Transparency: All OTAs started with an open communication experience, where the guest and owner could communicate using their actual email addresses and phone numbers. This has been replaced by relay emails, which were introduced to avoid fraud. These relay emails are, however, transient and cannot be used for future communication with the guest. This would indicate that the reason is more about future guest marketing and control by an OTA than fraud.
OVO Network ensures all the necessary communication details are revealed, and we also have anti-fraud checks and measures. This means all guests can be approached for more or extended stays in all our chalets.
Local Investment: Local communities rely on tourism and re-investment.
Undoubtedly, the OTAs have increased awareness of different destinations, which is considered a positive for local tourism by many less well-known regions. It has also seen hostile encounters with over-tourism and regional housing issues in many destinations. In these cases, Airbnb has been guilty of its volume property successes in unregulated areas, and all owners need to consider the oversupply potential.
The real downside is that the income generated by OTAs themselves is not re-invested locally but repatriated offshore with better tax benefits to shareholders’ advantage, not the local economy, which supports guests.
There is also a global trend towards creating more of a level playing field on web search dominance in general, on which OTAs have depended to a great degree, paying for top positions from commissions earned, a simple game of arbitrage based on massive investment and scale.
As an example, over 300 hotels and restaurants in France are attempting to combat the ever-increasing fees and terms on OTAs ranging from 15-25%, as explained on their website.
“We want the French to adopt the same approach when they book their holidays and to promote direct booking, which makes it possible to support thousands of jobs and investment projects, and to contribute to the development of our territory thanks to our taxes paid in France”
OVO Network is a team of individuals living in France and a great deal of our own income is invested locally to support the development of the region in a controlled manner.
Based on all of the above details, OVO Networks’ approach to Airbnb and other frenemy OTAS is to remain an active partner, provided it is to the benefit of our owners.
Airbnb’s current demographic is also not fully aligned with OVO Network’s accommodation base and guest demographic, nor its cancellation policies, cash management or complaint processes.
Independent owners who rely solely on Airbnb have increasing risks and are small fish in an increasingly large ocean. From the figures we witness, income and occupancy are less than specialist companies such as OVO Network damage control is out of their hands, and any changes to terms and processes are not optional. Airbnb and its competitors certainly have a role to play, but putting all eggs in one basket, or even two, is never a good idea!
Risk management is a vital part of the world economy; with war, recession, and the interest rate rising, it is all impacting our lives. Maintaining diverse marketing practices and a more personal approach to the business is essential. OVO Networks’ hyper-local level focus ensures our owners have less exposure, stable income, and more control, and guests have a more guaranteed holiday experience, building a solid relationship with owners and OVO Network.
Last but not least, you can call OVO Network at any time with questions and concerns: not so easy with global businesses!
Many thanks to Richard Vaughton for this guest content.
At OVO Network, we appreciate that navigating the property rental market without support is challenging, that’s why we’re here to help.
Whether you’re still searching for a property to buy, are in the midst of a renovation or are ready to launch your business, we’d love to hear from you. Our friendly team of bilingual property experts advise on property optimisation, pricing, interior design, marketing and more. Plus, we provide insights into the complexities of the financial and legal requirements.