Vrbo President on vacation rentals supply: ‘For most peak days there are not enough’

Jeff Hurst, Vrbo President, joins Yahoo Finance to discuss the boom in vacation travel and competing with hotels.

Video transcript

ALEXIS CHRISTOFOUROS: The huge demand for vacation rentals shows no signs of stopping. And that is good news for platforms like VRBO, which just had its best ever start to a year in the US. Joining us now is VRBO's president Jeff Hurst. Jeff, good to see you on the show again.

I'd love an update on supply. I mean, we keep hearing about all this pent-up demand. Are there enough vacation rentals out there on the market to meet that demand? And how are you attracting new hosts to the platform?

JEFF HURST: Well, thank you for having me. And we are really excited about the start to the year. When we think about the supply side of vacation rentals, in particular in the US, the reality is, for most peak dates, there are not enough. And so families who are wanting to go to top destinations like the Southeast coasts and Gulf Coasts, those are already booked up for Independence Day in large parts of the summer. And in many cases, there's just not enough homes for how many travelers want to experience this type of whole home vacation.

And so what we're doing is we've launched a new program called Fast Start, which helps partners and homeowners who've worked with other vacation rental sites to join our site, diversify the way they do business, and attract families who are trying to have the best trips of their lives. We're really encouraged with the results.

And we're also running more media campaigns to try and encourage more homeowners to sign up because it's such a great time to be in the business.

KRISTIN MYERS: Now, Jeff, I've looked at some of the homes that are offered on VRBO and, obviously, your competitor Airbnb. And it seems now as if hotels are actually cheaper, which is the reverse of what used to be true, thanks to a lot of the fees that we're seeing some of these homeowners charging, whether it's to clean or some other fees. And they're incredibly high. Is there anything that can be done to curb some of those, to make some of those homes actually affordable again and make people want to rent some of the homes or rooms through your platforms instead of saying, you know what, forget this, I'm just going to go to the Hilton or the Marriott?

JEFF HURST: Yeah. We work very hard to make our pricing model transparent and easy to understand as you shop across VRBO. And I think that the experiences we've developed is really proving that there's more demand than ever.

That does lead to where some owners are able to charge more than they might have been able to charge two or three years ago. But overall, in the vast majority of cases, the reason a home's more expensive than a hotel room is because you're getting two or three hotel rooms for that same price point.

And so we're still really, really enthusiastic about the value we provide. And we're constantly working with homeowners to make the fee structures simpler and to really describe the value that comes across. But it does cost more to clean a four bedroom, five bath house on the beach than it does a hotel room. And so there is some things that are structural. But we think it's an incredible value and are thrilled that so many people are trying it for the first time.

ALEXIS CHRISTOFOUROS: Jeff, what are you seeing in terms of where people want to stay and what they're looking for out of that vacation rental, not just here in the US? I'm curious about demand for international travel now that the EU is going to be opening up its borders to US travelers.

JEFF HURST: In general, most of the activity as we got to the beginning of the summer was still focused on domestic use cases. There's so many families who haven't seen their loved ones for a year or 18 months. And our latest ad campaign really celebrates these reunion moments. And so what we've seen is an emphasis on Southeast coast, vacation getaways to the mountains. The Lakes region in the Midwest has had the biggest summer ever.

But as more and more flights open up and as countries start to change their regulations in terms of what it takes to be admitted, we are seeing an acceleration in international, in particular Mexico, Central America, and starting more and more, the Caribbean. We haven't seen Europe pick up as much yet. But we're really enthusiastic that that use case is going to come back as the European governments encourage it more.

KRISTIN MYERS: I do want to ask about your competitor, which is Airbnb. They're also taking initiatives to try to get more and more homeowners, cabin owners, apartment owners to sign up on their website. And they also have other offerings, like Airbnb Experiences, where you can book tours or excursions through the platform.

How are you making VRBO seem more palatable than a platform like Airbnb, not just for the homeowners that are trying to list-- and I have seen some homeowners seem to list on both platforms-- but also for folks that are out there and they're traveling?

JEFF HURST: Yeah. When we think about the traveler experience, we're obsessed with what we call a complex family trip. We think if we can help three generations with kids experience a vacation home, we've solved the hardest thing in travel. And so we've really invested in tools like trip boards that make it easy for a group to find the perfect home for each other and facilitate that booking process.

Because of that, it really helps us on the partner side too. And so our homeowners and our property managers typically really appreciate the quality of guests we send, the advance lead time, and the fact that people are booking for longer periods of time. That helps it make it easier on their properties. And it also helps them make more money.

And so we think we've got a strong proposition for the travelers and the homeowners. And we're really enthusiastic with how we're growing both sides of the marketplace in that context.

ALEXIS CHRISTOFOUROS: Any advice for people? I mean, it's a little late now. But I'm sure there are a bunch of people out there, especially given COVID, who haven't yet made plans for this summer and are thinking about a vacation rental home. Any tips for them on how they can score one late into the year?

JEFF HURST: I think that the key is some flexibility right now. A lot of the top dates and top destinations are booked up. But one of the things that we've really been encouraged by is how many people are willing to try different drive-to destinations. And so my biggest advice would be, one, start looking to book now. But two, consider exploring some places that maybe aren't the place you went two years ago or three years ago.

And so there's still incredible availability in places like the Poconos and Gatlinburg Smoky Mountains and Park City, Utah. And so I think if people are broadening their horizons and really focusing on how do they get that perfect home in a place that's great for a reunion and being with family and friends and maybe a little bit more flexible with what's around it, then I think they're going to find that there's still a lot of great opportunities out there.

ALEXIS CHRISTOFOUROS: All right, Jeff Hurst, president of VRBO. Thanks again for being us.