Home » Homeaway » Is Homeaway Telling The Truth About Best Match?

Vacation rental marketing guy Alan Egan  By Alan Egan

Have you gone from the first page to the 5th?

Homeaway’s changes to their sort order are having a big impact on owners across the globe – This article looks at some of what’s going on.

The trouble starts when a company operates a top heavy business combined with a pay for display subscription model because they can’t fulfill on their exposure promises.

I could go on (and on) but here are some owners comments that I’ve come across on various vacation rental forums on the web…

This first comment equates to what I have been saying for the last couple of years, it just sums it up in a much better way than I have…

This is all very interesting trying to decipher and validate the
published criteria for HomeAway’s “Best Match”, but it is my personal and
professional opinion that all of these explanations are a plausible smoke
screen and the seemingly haphazard search results people are seeing
returned by “Best Match” reflect that.

In my opinion, “Best Match” has one driver for HomeAway:

*Keep the largest number of subscribed clients “satisfied enough” to keep
paying for their subscription*

It’s that simple, and if you think about it, from a HomeAway business
perspective, and the fact that they have to continue to primarily satisfy
their shareholders, it’s the only one they can have as a corporate concern.

Unfortunately, in this scenario, the subscription model which everyone
clings to, really starts to create problems for HomeAway. Sadly, with the
increased number of properties coming to the vacation rental market and the
number of travelers not quite keeping pace, the days of a $500 (or even
$2,000) subscription keeping you booked throughout the year or even season
are most likely gone.

Here’s why:

Does it makes financial sense for HomeAway to continue to send an single
owner $50K in bookings on a $500 subscription if there were a way to
constrain that?

I’m pretty sure that there are some of you in this ballpark, or close to
it. That equates to a 1% commission on those earnings, 1/10th of what they
are charging their commission based customers. One has to believe that
HomeAway feels a 10% commission on earnings is “about right” for what they
do, since that’s what they are charging their commission clients, so why
would they continue to get a lot less from their subscription clients?
Sure, payment up front has some value, but that’s a lot of money to be
leaving on the table (actually, in the pockets of their clients).

Not only that, HomeAway now has many other “mouths to feed” with the
dramatic increase in number of properties in most locations. How are they
going to get those owners to continue to subscribe if the same stable of
“long time” properties win the lion’s share of the bookings?

Wouldn’t it be better for them to temper that $50K to say, $25K, and send
the other $25K in bookings to other subscribed owners, keeping them
satisfied and subscribed? Is the long time subscriber going to walk away
from a 2% commission ($25K for $500) which is still a 50 times return on
their investment? Would they walk away from 4%? 8%?

HomeAway is betting you won’t, even if it is 1/2 or a 1/4 of what you made
last year. Still better than that “abhorred” commission model, right?

What we are really seeing is the “reverse engineering” of the subscription
model to match or approximate the commission model. By suppressing your
visibility after you have earned a certain return, HomeAway is able to keep
yours and all of your competitor’s ROI in line with their target for all
their properties, theoretically “spreading” that revenue across all of
their properties and satisfying the largest number or property
owners/managers, maximizing their customer base and, in turn, their
profits. It’s what all “good” Corporations do.

And if it doesn’t work for some of us, so be it. They have higher powers to
answer to (ie shareholders) and probably feel there are plenty of
owners/managers who will accept their lower, targeted ROI. Looking at the
current advertising landscape with the shift on to a much heavier
commission based model, they may be right. Not to mention that they are
more likely be able to “shape” new owners to their vision of the vacation
rental marketplace, as opposed to us “old guard” who are stuck in our old
ways of being responsible neighbors and actually wanting to vet our guests
to minimize problems with our properties and neighborhoods. Who needs any
of that to bog down their transaction churn.

It’s really an impressive plan to reshape the industry, but that’s been the
marching order for HomeAway since they amassed that $500M war chest to
consolidate and commoditize the industry back in 2005, It’s called
“disruption” and our industry is just one in a long line of industries to
be turned on its ear by “big money”.

That is so well put that I wasn’t going to share other owners thoughts but I wanted to highlight how these changes are affecting owners with some real figures as I think that many owners just post their listings and don’t look into how they appear in the results.

Here’s what another owner has noticed…

From 1st to 137th – “Best Match” unintentional consequence?

http://www.vrbo.com/2461 is my property in Ft. Walton Beach, FL. The listing is indexed in the Fort Walton Beach > Okaloosa Island index and has been in the #1 position for Okaloosa Island (when viewed in the “default” sort without entering any dates or applying any filters.)

http://www.vrbo.com/382 is my property in Dillon, CO and has been in the #2 position for Dillon (when viewed in the “default” sort without entering any dates or applying any filters.)

I pay for the Platinum subscription and US Bundle for both listings.  My listing quality & response rate has been 100% for both properties ever since they’ve been measuring these things.

Since late last week I’ve been keeping a close eye on my listings’ placement in their indexes, when viewed in the “default sort” – strictly by location without any dates entered or filters applied.  Imagine my dismay to see that my CO property has dropped 20 positions and is displaying in the 22nd position in Dillon.  Even more alarming is the fact that my FL property has dropped from #1 to #137 — 3 pages deep!!

The reason I was keeping such a close eye on my listings’ placement since late last week is because Homeaway launched the “Best Match” algorithm recently. If you haven’t heard about “Best Match” or read about it, you can do so here:

https://help.homeaway.com/articles/How-does-the-best-match-algorithm-work

I have no problem with the “Best Match” philosophy as described by the article above.  But when a traveler does not enter any dates or apply any filters, I would expect the listing placement (or sort order) to be as it was before…..first by subscription level and then within each subscription level sort order is determined by listing quality.  That is fine and fair….but that is not the case!

I can’t figure out why when using the default sort all of a sudden there are 20 listings above mine in Dillon that were never there before, and why there are 136 listings above mine on Okaloosa Island that were never there before.  Of course, I called CS and the agent could not tell me why my listing has dropped from page 1 to page 3 (in FL.)  First she said it was probably related to listing quality, but that can’t be the case because some of the listings that are now above mine do not have any reviews and some of them do not use the “Book it Now” option.  Then she said that they do rotate pay-per-booking listings so that they can get some exposure, but these listings are not “rotating”…the same listings are there each day when I check.

I fear that perhaps these listings that have suddenly appeared at the top of our locations ARE Pay-per-booking listings, because Homeaway makes more money off of those listings (10%) than they do off of the subscription listings. The article above says:

Best match is also used to determine the optimal placement of pay-per-booking listings throughout the search results.”

But when a traveler does not enter any criteria (dates or filters) then best match should not be manipulating the sort order, in my opinion.

If you have noticed that your inquiries have suddenly dropped off in the past week I would recommend doing your own test by going to your property’s location, and without entering any dates or applying any filters check to see if your listing is in the same position that it has been in the past.

I’d love to hear from some of the other community members if you are seeing similar results as I have.

Here’s another owners view…

[pullquote align=”full” cite=”” link=”” color=”” class=”” size=””]We pay for listings as subscribers, so HA/VRBO has no right to hide these paid for listings from anyone![/pullquote]

And another…

I share your dismay.  I’m in the same sinking boat and I don’t think it is at all unintentional.  Best Match came up in a discussion I started a few weeks ago about the new rules for Featured Listings.  This is a very tough pill to swallow when a Platinum subscription is putting a $1299 dent in my wallet!  (and you’re out even more $$$ for the US Bundle)

My Platinum listing, which is going into its 5th year of renting, also recently tanked…    from a desirable #8 out of 847 rentals, to appearing anywhere in the #45 to #98 range.  I also have a Gold listing (which I downgraded from Platinum last year) in the same area.  It has dropped from page 1 to page 3.  My map region has 2800+ rentals, so I can’t help worrying about search position.  I’ve been conducting my own investigations lately (renewals are coming up), and these lower placements happen routinely – when no dates or filters are applied – whether or not I am logged in, utilizing various browsers on my laptop, phone or tablet.  My family gets the same results from office, laptop, etc.

Both of my listings are 100% compliant with VRBO’s “Listing Quality” criteria.  I feel that if I’m paying the high price for search placement, I may as well get the most bang for my buck and go along with everything else.  So I have:  BIN, HA Payments, 45 & 33 positive reviews, quotable rates, photos, map, updated calendar, 7 recent on-line bookings, response rate 100% within a hour.  UGH!!!  There is literally nothing else I can do to improve myself in VRBO’s eyes, yet I am being penalized by Best Match.  There are numerous listings which now appear ahead of mine that obviously do NOT meet VRBO’s requirements for a “better booking experience” (no quotable rates or BIN, calendars that haven’t been updated in over 2 months, less than ideal response rates, PM listings, etc).

Like you, I fail to understand why this happens when NO dates or filters are input.  What exactly is determining the search order then?   VRBO says they are showing the most relevant listings – relevant to WHAT?  Even when I filter by bedrooms, dates, or some other criteria, my listings are still below others that are not as “bookable.”

This is in the Help section, from How do Search Results Work on HomeAway:

“Travelers have a variety of options where listings will appear based on the traveler’s choices or preferences, like filtering by price or searching by map. These results will not always appear in order of subscription level (the emphasis is mine here).  For example, when a traveler adjusts the search from high to low price or number of bedrooms; these are traveler selections that result in an order relevant to those selections.”

That statement, along with the fact that Featured Listings are no longer included with Platinum and Gold subscriptions, is enough for me.  I’m done paying the big bucks.  HomeAway has (unintentionally?) succeeded in devaluing their biggest moneymakers – the higher priced subscriptions.  AND they are no longer selling Featured Listings as an add on to the lower subscriptions.  Why on Earth would they do that when the goal is maximizing profits?  Is it unintentional?  Nope.  Something bigger and more profitable (for them) has to be in the works.

I’m not down on VRBO / HA.  I’ve had great success and I love what they have to offer!  BUT – I’m apprehensive and not in a good way.  I believe we’re seeing a leveling of the subscription tiers, but to what end?  A one price fits all structure?  My renewals are coming up and I will be downgrading…   drastically.  As I stated in a previous discussion, I believe Best Match is a bunch of hooey.  It’s just a smokescreen for something else and it is limiting owner control over our own listings.  I’ve concluded that Best Match is nothing more than a sketchy, gradual intro into whatever new rate structure is coming.  I’ll even wager that Customer Service can’t help us because they are as in the dark as we are.  For now however, I’m more than a little concerned about my 2016 rentals.  My busy booking season is coming up (Dec – Feb) and I can’t help fretting over what Best Match has in store for us.

Here’s another interesting take on things…

It just occurred to me that HA might actually be doing bad matches on
purpose so everyone who has suddenly lost all their business says “fine,
charge me 10% per booking, at least I’ll GET bookings like I used to.”
This idea is more conspiracy theory’ist, but it could make sense.

ps I already sold one VR, stopped looking for replacement VR’s as I
previously had been, and am no longer counting on any income from my
second home which I still vacation rent on the high season. I am even
thinking of moving out of my “VR ghetto” neighborhood into one that
doesn’t allow them. I think anybody considering new purchases should
really think hard about it.

 

The various vacation rental forums are full of owners complaining about ‘best match’ search results and I just picked a few that stood out for one reason or another.

You may want to check your own listings to see how these ‘changes’ have affected your properties positioning.

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