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    A Q&A with Wolfgang Pagl of Expedia Group

    Arrival spoke with Wolfgang Pagl, director of Vacation Rentals at Expedia Group. Pagl gives great insight on technology in the industry, the impact and misconceptions of online travel agencies (OTAs) and what trends you should be watching out for in the future.

     

    1. What is your role at Expedia Group?

    I’m the director of Vacation Rentals at Expedia Group, sitting within the Lodging Partner Services (LPS) division which is responsible for sourcing lodging supply that reaches travelers through all of the Expedia Group brands. I oversee the global Vacation Rentals account management team who onboard new property managers onto our platform and work with existing partners to help drive demand to their business. I’ve been working at Expedia Group for about 15 years, previously heading up our Eastern Europe account management team before taking on this role. Most importantly, I’m a huge fan of Vacation Rentals – my wife and two kids frequently choose them for our family vacations.  

    2. Can you give an overview of Expedia’s position within the vacation rentals industry?

    Expedia Group has been active in the vacation rental category for more than 10 years, helping it grow from an alternative accommodation option to a common and popular lodging choice. In the past four years, we have strengthened our offer, acquiring vacation rental marketplace HomeAway (now called “Vrbo”) in 2015. We’ve additionally been strategically building vacation rental supply on our Core OTA sites.

    We recently announced that we’ve changed the name of HomeAway to Vrbo®—given its strong consumer awareness and brand loyalty. Vrbo operates brands around the world, such as Abritel, FeWo-direkt and Stayz while still offering a breadth of different types of lodging options appealing to different needs—from beach houses to castles, and ski chalets to treehouses.

    There are now over 460,000 Vrbo listings available on our Core OTA (Online Travel Agency) platform as of Q1 2019 and Vrbo now offers over 1.9 million online bookable listings (Q1 2019). Total gross bookings for Vrbo (then HomeAway) in 2018 was over $11.4 billion.

    3. What value can an online travel agency (OTA) bring to property managers? How can OTAs help them overcome challenges facing the industry?

    The global vacation rental industry is currently valued at over $100 billion[1] and continues to grow rapidly. First and foremost, we know that property managers want to tap into an international audience. Properties listed on our platform are marketed on over 200 travel booking sites in 75 countries, serving over 40 different languages; which attracts over 750 million monthly site visits.

    However, I think there’s a common misconception that the added value stops there when it comes to the value an OTA can offer. It’s also about being locally relevant. The vacation rental industry is incredibly fragmented, highly competitive and constantly evolving. The multiple sub-categories that fall under the vacation rentals umbrella means that there is little standardization across the entire ecosystem. There are also huge dichotomies at play in terms of the global scale of the industry versus the local focus that is required in order to be successful. That means there’s a need for local relevancy while operating at a global scale. It’s about putting the customer first, and that’s our sweet spot.

    For us, this means enhancing areas like language translation and localized content or offering locally relevant payment options—all aimed at making sure we provide a great experience for customers in their market. We also have a team of consultative market managers that work closely with the local teams to offer them useful data insights on the local market and relevant technology tools to suggest strategies that help drive demand to their properties.

    We also know that package travelers – people making lodging, airfare and/or car bookings – are more valuable than non-package travelers to property managers. They’re a great way to build a strong base of incremental demand without eroding retail rates. Package travelers also typically book further in advance, stay longer and are less likely to cancel due to the non-refundable flight element. Expedia Group data (one year ended H2 2018) showed that vacation rental packages had almost half the cancellation rate of a standalone vacation rental booking. This is more than a 60% longer booking window and more than a 65% longer length of stay compared with a standalone vacation rental booking.

    4. Is technology important for the industry? What role does/will it play?

    Technology is the most important element! It is helping to shape, evolve and innovate the industry every day. We’ve already come far. At Expedia Group, we have over 50 certified connectivity vendors who connect VR suppliers to our marketplaces, keyless check-in, dedicated revenue management optimization tools, plus a suite of guest engagement tools that allow properties to engage with guests from booking through checkout. However, there’s still a long way to go. I think so many different elements will have a major impact. From the tools available to property managers that help them understand their market, audience and competitors to innovations in machine learning and AI that turn data into more manageable, bitesize insights and improve the customer experience.

    Expedia Group technology and content investment was more than $1.6 billion in 2018, resulting in new consumer features and tools for the Expedia Group brands. In our lodging supplier space, we’re testing new functionality that will provide property managers a portfolio view of their properties. Doing so allows them to more effectively evaluate their performance and optimize revenue leveraging tools on Expedia Group PartnerCentral, our technology platform available to lodging partners.

    It isn’t just technology tools that are important—it’s data. There is a real lack of data available on the entire industry, but it’s needed in helping us better understand the industry and to shape constructive and meaningful conversations with governments and regulators. We use behavioral data to drive product development with A/B testing, which is designed to improve conversion on an ongoing basis. It also allows us to provide actionable insights to optimize a property manager’s business.

    I think AI is an interesting area to watch, not just in vacation rentals, but in the travel industry as a whole. Expedia Action for Google Assistant is now live, for example, letting travelers browse and book hotels, cancel reservations, check their Expedia Rewards balances, hear packing lists and more. It’s a much cooler way to shop for travel.

    5. What trends should we watch out for in 2019 and beyond?

    In the short term, I think we’ll see even more tech start-ups disrupting this industry, particularly in the property management software space. Companies that offer an end-to-end property management platform and help automate tasks after a traveler has booked will do well – that’s the sort of solution PMs are looking for.

    In the longer term, I think we’ll see more consolidation of different players within the industry, and not just property management companies. I think players from the entire ecosystem, including software and connectivity providers, will see the value in collaborating. I also think we’ll continue to see the benefits of AI and machine learning in helping to understand and shape the consumer booking experience and how it can make the overall experience as seamless as possible. It’s an incredibly exciting time to be in the industry. I’m looking forward to us continuing to offer travelers an increasingly wide range of different accommodation types for their perfect trip.


     

    [1] https://www.airgms.com/vacation-rental-industry-trends/

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