Gavin Gray
Increasingly, and we’re seeing this more and more in the industry, is pricing tools, yep, to enable you as a property manager to be able to price your vacation rentals in a way where you can look to perhaps maximize occupancy or try and drive the highest yield you can for your property.
Sebastien Leitner
Welcome to the turndown. This week, I sit down with Gavin Gray from Vrbo. Gavin heads up vacation rental connectivity integration, partnerships, connecting to Vrbo, leveraging the platform, reaching new customers, and attracting travelers that are looking for exactly what Vrbo is offering. A holiday, a vacation, a family getaway. Come join me and find out what Vrbo is all about and where they’re going, what’s happening in this space, and what are some challenges and opportunities, and most importantly, best practices for property managers around the world to leverage a platform such as Vrbo.
Gavin, welcome to the turn down. It’s a pleasure and an honor to have you join us. You’re joining us, if I’m not mistaken, from London today. Is that correct?
Gavin Gray
Yeah. Thanks for having me, Sebastian. Yep. I’m in our great Expedia London office, quite near King’s Cross in the center of London. And, yeah, chilly London, middle of winter.
Sebastien Leitner
The obvious question, is it raining?
Gavin Gray
No. It’s actually dry today, but very gray as you might imagine.
Sebastien Leitner
Okay. Perfect. Perfect. Well, welcome to the program. Thank you for joining us today. I’d love to kick it off with our sort of almost, you know, trademark question, which is what is keeping Gavin Gray up at night these days? Oh, wow. I’d love to take it wherever you wanna go with it.
Gavin Gray
Well, the last couple of nights, it’s been my wife’s leg. She’s had a broken leg, quite a badly broken leg, and she’s just recovering. So, plenty of work around that at the moment. So that’s what’s keeping me up at night, I guess, from a personal point of view.
From a work point of view, do you know, Sebastian, not too much keeps me up at night, but there’s a lot of things that I kind of think about. And, you know, we’re really kicking off the start of what we hope is an exciting two thousand and twenty four year. So lots of work related planning and getting that up to date as well as kind of closing off the last bits of twenty twenty three. But, I sleep pretty soundly. Yep.
Sebastien Leitner
Excellent. Excellent. Gavin, I’ve known you and associated you with, I guess, short term rental, vacation rental, VRBO, for quite some time. I’d be curious on how you ended up in this industry. Like, walk us through your career path, your career progression. How did you become the Gavin Gray at VRBO?
Gavin Gray
Yeah. I guess, you know, I’m from New Zealand originally, so things kinda started there when I was at university and decided to do some study in the tourism area when it was a relatively new field. And I think that was driven off the back of just a thirst for travel. Right? It’s always been kind of in my blood and, I guess, in my family’s blood and something that I’ve loved to do. So to look to develop that as a bit of a career was something that I started with.
And then, you know, more laterally, well, quite a while ago, when I actually came to the UK and have settled here, getting involved in various tourism related roles. So I’ve worked in kind of a little bit around the attraction area and perhaps some consulting in that area. And then here in the UK, I was involved at an early stage in the company called Aviva, which was, and still is, in the smaller to medium sized, I guess, bed and breakfast hotel type market. We were involved in a whole range of activities there. It was a fun start up type mode, as you would appreciate. So, we rolled our sleeves up and got involved in a whole lot of different areas. But more likely it was involved there with content, and then especially around distribution channels and managing the distribution channels for Avivo.
And really, that got me, I guess, in contact with HomeAway back in the day, but over ten years ago. And so they were a channel that we were distributing to. So I was kind of in the early stages of building out both an Expedia channel before they actually purchased the HomeAway and Vrbo business. And then that kind of morphed me across with some of my contacts here into the HomeAway, the Vrbo, and then the Expedia group as we’ve kind of expanded. So I sat on one side of the distribution fence, and I’m now sitting on the other side and really trying to drive great supply.
Sebastien Leitner
Yeah. Walk us through a little bit around what your core responsibilities are in your role at Vrbo and what you look after.
Gavin Gray
Yeah. Sure. So at Vrbo, effectively, if you go on to the Vrbo sites and a couple of million listings or homes as you might see them, they pretty much come on to the website in one of two ways. Either it’s tending to be individual hosts or owners or perhaps smaller property managers, and they manage those listings, I guess, manually through an extranet and they do that piece. And that’s probably half our inventory.
I’m involved in the other half. And what that is is we work with a whole series of property management software companies and channel managers that bring to us lots of vacation rental industry at scale. So we’ve got kind of like a million listings that we are working with that come to us through integrations. So my role specifically is I work in a team of connectivity account management that I run. We have a bit over a hundred partners that we work with globally, software companies, and they bring to us through an integration, their contracted properties, all in one go. So, some of our partners, for example, might bring us as many as seventy thousand properties or listings through their integration feed, and it’s my role to work through the commercial and the, I guess, the operational parts of those relationships.
Sebastien Leitner
That sounds exciting. And I assume that especially in vacation rentals, you need scale. You need sort of operational efficiencies because the unit of inventory can be quite, I guess, dispersed, unlike a hotel that has potentially multiple units of each room category. Is that a fair statement?
Gavin Gray
I think it is a fair statement. And most of what I’m dealing with is what we might consider to be almost like single unit type properties. Right? So, you know, and Vrbo very much specializes in properties that are great for families and larger groups. So, you know, almost like your stand alone vacation rental or here in the UK holiday cottage, whatever we might wanna call it, that as you mentioned, it tends to be quite individual. Yep. It’s not a cookie cutter like hotel rooms where you have two or three different types of hotel rooms and you’ve got three hundred of each within a large hotel. You know, each one is quite bespoke.
So that brings with it challenges in terms of working in that sector and managing an integration around it. But at the same time, that’s part of the exciting unique experience, I think, that vacation rentals bring to us and to the customer.
Sebastien Leitner
Yeah. I wanna talk a little bit about vacation rental and hotels. Right? Because when I talk to hotels about vacation rentals, they’re like, yeah, that’s vacation rental. When I talk to vacation rentals about hotels, they’re like, yeah, that’s hotels. So it almost seems like there is somewhat of a wall in between those two lodging businesses that said, we are similar, but we’re not similar. We’re somewhat different. Where do you see sort of in your opinion the core differences between hotels and vacation rentals and how they are managed and how they’re distributed?
Gavin Gray
Yeah. Sure. I mean, you know, as I mentioned before, half our inventory at Vrbo probably comes from individual owners that have got like one or two or three properties. Right? So they’re relatively smaller operators in that regard. And whilst we are dealing with certainly at times with larger property managers that give us hundreds and thousands of properties, there still tends to be that uniqueness amongst them.
The one thing that I do find, and it’s almost a blurring in some areas between hotels and vacation rentals. And maybe how I might best describe that is almost in terms of the experiences that some of them are starting to offer. Right? So if we think about most people previously have stayed in hotels and are increasingly dipping their toe in the water around staying in vacation rentals, for example. And I think the pandemic probably heightened that with more and more people staying in vacation rentals. And I think what we have done on the short term rental or vacation rental side of the industry is we’ve taken some of the great things that hotels do in terms of often offering really great services and really high quality facilities and amenities. And we’re starting to see some of that morph, I think, into some of our better vacation rental companies and what they’re offering as experiences to their guests.
Sebastien Leitner
So double clicking on that, I’m curious if you can give a couple of examples of what you’ve seen happening in the industry. So what are some of the things that you previously found in hotels that are now, I guess, discoverable in vacation rentals, in your opinion?
Gavin Gray
Yeah. I think one of the, I mean, it’s even as simple as the linen that’s in vacation rentals, you know. Probably some of your first vacation rental experiences staying, you probably even had to take sometimes your own towels and sheets. Right? I mean, we’re a long way away from that now. Right? And when you used to go to a hotel and get really crisp, clean sheets, and that kind of experience, I think we are seeing more of that type of experience across into the vacation rental side of it. So something as simple as that.
I think we’re also seeing, even with some vacation rentals, concierge type services that are being offered by some of the niche companies in that regard where you can add on to your stay and get different sorts of experiences around that. The amenities that are being offered, I think, what was it, one of our best used facilities or almost wanted facilities from a feature point of view on our filters on some of our websites are things like great coffee machines or something like that that traditionally you’ve had in good hotel rooms and they’re starting to transition across.
And I guess we’ve also seen some operators perhaps that have traditionally been involved in either vacation rentals moving into a bit of the hotel space or especially the hotel space moving into vacation rentals. And I could think of Villas by Marriott or something like that where hotel groups are taking more of an interest in something that’s a little bit of a longer stay and perhaps moving away from a hotel room type experience.
Sebastien Leitner
Yeah. And let’s dive into this a little bit. Like, we’ve seen a lot of changes happening to the vacation rental or traditional vacation rental industry since the pandemic. Maybe some of this has been accelerated by the pandemic, if you will, as well. But I’d love to pick your brain around that. So one area that we’re seeing is that there’s certainly some consolidation amongst the industry, and with that, maybe the industry as a whole is becoming more professional. There’s more services. There’s more guest services that are being offered. I think there’s probably a bigger investment in technology. I think addressing some of the pain points around how do I check-in, how do I arrive, where do I go if I have a question and etcetera. Walk me through some maybe one or two trends that you were seeing coming out of the pandemic specific to short term rentals that you’ve observed.
Gavin Gray
Yeah. Sure. I think a couple of those you’re almost alluding to there, like keyless entry systems, clearly Wi Fi and Wi Fi at such a level that you could actually work in the vacation rental and feel like you can be on a Zoom call. Yeah. And I think leisure or something was one of the terms, business leisure. You know, something like that that’s happening through the pandemic. So we’re certainly seeing things like that.
I touched upon before about concierge services. There are companies that are doing that really well and offering that service across a wide range or a number of property managers so that could be taken up. We also see really good digital guidebooks and services like that that are providing lots of information to the guest when they’re actually at the vacation rental about the types of things that they could be doing there. So services like that are something that we are especially seeing.
And then there’s other technologies perhaps less on the guest side but more for the owner side or the host. So, again, keyless entry systems is an example there but almost like noise monitoring systems. Right? So that to avoid a party house type scenario so that keeping neighbors happy around your vacation rental and from a safety point of view as well.
Sebastien Leitner
Yeah. Yeah. Look. We may have people in the audience that are thinking of getting started in this industry. Right? Like, that are thinking of potentially becoming a property manager, etcetera. I’m curious, through your experience at HomeAway, Vrbo, etcetera, but also your vast industry experience, what are some of the best practices or some of the recommendations you would have to a property manager just getting started in this industry. Right? Maybe they’re at the brink of five to ten units or properties, but they wanna elevate their businesses into the next level.
Gavin Gray
Yeah. Sure. And I think that there is a little bit of, we do see some sort of evolution, often along the way than someone’s managing one property and then two properties. And then Susie down the road sees what a good job you’re doing by filling the property and your friend Fred around the corner also seeing it. And then, oh, can you help manage my property, etcetera. So we do see that kind of an example of growing into smaller level property managers and then some growth of that.
I think that there’s a lot of resources that are out there, increasingly, about being sophisticated and being able to manage your properties well. So clearly for individual owners that want to get into managing multiple properties, there’s some great case studies that are out there for companies that are doing that really well. Focusing on quality, I think, is always a great place to start. Being able to give a consistent experience to your guests over time is paramount because that’s either word-of-mouth or then the reviews that you’re getting when you start to distribute your properties past trying to sell it yourself are vital to your ongoing success.
And then a lot of the property managers that we are working with or even the software companies that we’re working with have a whole range of services perhaps within their suite of functionality that they’re using. So whether that’s accounting systems or smart systems to be managing cleaning rosters and changeovers. Increasingly, and we’re seeing this more and more in the industry, is pricing tools, yep, to enable you as a property manager to be able to price your vacation rentals in a way where you can look to perhaps maximize occupancy or try and drive the highest yield you can for your properties, and to give you a flavor as to this is how perhaps I could be pricing my properties on my own website as well as across online travel agencies like Vrbo or Expedia.
Sebastien Leitner
Oh, fascinating. Especially the pricing component, we see that happening quite a lot at Cloudbeds as well. But it seems that the ability to track demand, the ability to track what competitors are doing and pricing smartly your own products and services in line with demand pattern changes is becoming a critical component.
Gavin Gray
Well, I was just gonna say, I think it is to remain competitive. Yeah. Because this is a competitive industry with increasing numbers of supply coming into the marketplace. Especially now we are kind of out past the pandemic as such when maybe some of the inventory contracted a little bit. So, there’s lots of competition out there.
I think each year we see the bar get raised in terms of the quality of experiences that the individual hosts or homeowners or the property managers offer. So for those coming into the industry or for those trying to grow within the industry, then keeping with that raising bar is pretty important. Pricing is very much a key component of it.
And we are certainly seeing, I guess a good example here, Sebastian, maybe from the pandemic was during the pandemic, some of the things that were really vital to travelers. Cleanliness. Yep. And the safety around cleanliness. Having your own vacation rental rather than perhaps shared spaces or something like that. And things like price became less important. Cancellation policies and the flexibility around cancellation policies were really vital at that stage.
Whilst some of that is continuing, we are increasingly seeing perhaps a movement back towards competitive pricing being a really, if not probably the number one component in terms now of which property or which vacation rental I might choose. So we’ve seen that dynamic shift back towards value for money. And when we see the macro environments that most of us are facing where times are quite tough from a financial point of view for a lot of people, it makes sense to have a great pricing tool that at least enables you to be competitive with your type of inventory in the locations that you’re in and with the facilities and amenities and experiences that you’re offering.
Sebastien Leitner
Is this another way of you saying prices will become under pressure depending on demand pattern? Meaning, that we’re no longer able to maybe keep rates at the pandemic levels.
Gavin Gray
I think we’ve already seen that’s gone, Sebastian. Right? I think we’re already seeing a movement away from that. The best properties will always command a great price. And especially in destinations where there’s relatively either lower supply or as you say a heightening of demand. But I think consumers are increasingly price conscious. And again, just with cost of living increases that most people are facing, certainly most of the developed world I guess you’d say in that regard, then being mindful around pricing is really key.
And perhaps there’s a little bit of a boom through the pandemic that we’ve come back out from the other side of, and so average daily rates or something like that will, I think, have softened and leveled out a little bit more.
Sebastien Leitner
Yeah. I wanna talk a little bit about travel trends. Right? Looking ahead. Yep. Thinking about maybe the destination, but also the type of properties that are becoming hot. When we sort of rewind the clock in twenty three, maybe twenty two to a certain extent, a lot of people were talking about leisure or working while traveling, if you will. I’m curious. Maybe let’s start with the destinations or location. You’re based out of London. I’m curious in your perspective. What are sort of some of the hot destinations that you’re tracking in twenty four?
Gavin Gray
Well, we’re obviously a global company. Right? And I guess our hotspots at Vrbo continue to be, we’ve traditionally been strong in mountains and lakes and seaside type destinations with larger houses or larger properties in those destinations. So I think we’ll continue to see that those will always be popular for family type vacations and especially for our larger groups.
I think we are seeing a little bit of a swing back towards some urban or semi urban secondary type city type destinations as well. And I think that’s not just with vacation rentals but we are also, Expedia Group is pretty significant in the hotel space obviously. We are seeing the hotel side of our business also growing as well. So I just think that there’s probably a heightened confidence for people to want to travel and perhaps that pent up demand that was talked about, I think, was a real thing. Clearly, people have had the opportunity in the last year, eighteen months or so to kind of be traveling. But I think that thirst for travel will continue onwards.
And we are certainly seeing that everywhere is hot destinations for us kind of at the moment. But perhaps what we are seeing is perhaps a bit more of a lean back towards international travel. I think probably most people think that business travel is coming back, but perhaps a little bit slower than some of the other travel. But certainly people willing to get a little bit further away from home whereas perhaps during the pandemic, they were going to more drive to destinations. I think we’re seeing more of a pattern towards those types of international trips as well.
Sebastien Leitner
So if I may paraphrase, to a certain extent, while pent up demand and sort of revenge travel may be things of the past, you still think that travelers prioritize experiences and travel as a whole above other expenses. And it will continue to see significant demand in the summer period or in the peak travel.
Gavin Gray
Yeah. I think so. Yeah. And I think the only perhaps caveats to that are what we discussed a little bit earlier with the likes of macroeconomic environments and cost of living having impact onto people. So perhaps what we are seeing is sometimes we don’t see so much trade off as people not traveling at all, but maybe they might travel for perhaps a shorter length of stay or perhaps instead of an average daily rate of this amount that they were prepared to pay, they still wanna go away. But this year, we’re actually paying a little bit less on a per night basis to do our holidays because we haven’t got quite as much budget available to do it. But I think we’re still looking in a pretty rosy space.
Sebastien Leitner
Yeah. I mean, speaking from my own personal experience, I’ve got two boys and a wife and a dog. But when we travel, we look at destinations as well. And there are certain destinations that have continuously priced themselves out of our reach, where we’re looking at maybe a cheaper country or location for a summer holiday, because it’s just been too expensive for us to spend what maybe pre pandemic would have been easily possible.
Gavin Gray
Yeah. Sure. So, I think, but again, I think the point that we’re both making here is you’re still gonna go away. Maybe you’re just gonna trade to something different. That’s excellent. That’s excellent.
Sebastien Leitner
I’m curious. Let me, I wanna talk a little bit about your own travel behavior, etcetera. When do you pick a hotel versus a vacation rental? Or do you have to, as a Vrbo employee, always stay at a vacation rental?
Gavin Gray
No. We’re not quite so draconian here as that. And I guess in my last couple of experiences, they’ve typically been with other family members, so they lend themselves well to vacation rentals. And where three or four different couples or something like that can sleep. And other kids as well could kind of all sleep under the same roof, which isn’t so easy in a hotel, obviously.
And I think it depends on the destination for me. If I’m doing city breaks and something like that, then I will probably try and stay downtown and probably more likely to be in a hotel room, something like that. If I am staying somewhere for a little bit longer where I want the ability to have more space, to perhaps have communal areas where it’s easy for people to be, then I’ll go and do that. So, I trade them off both.
I have actually used vacation rentals on business trips that I’ve done. Especially if I’m staying a few nights. And again, that’s determined on the destination that I’ve been to. But Austin is one of our headquarters in Austin, Texas in the US. And on a number of times, I’ve either taken a unit downtown and used that as my base for a week when I’ve been working. And a couple of times, with other colleagues, we’ve actually hired a larger house. It’s been great value for money and enabled us to perhaps from a team building or a bonding type activity, that kind of works as well and certainly good value for money. So I pick and choose based on the situation.
Sebastien Leitner
That’s exciting. I was gonna ask you about your favorite barbecue place in Austin, Texas, but that may distract us.
Gavin Gray
I’m not an expert, but I think Terry Black’s was the last place that I’ve been to. And the slabs of meat that come out and get put on the table are always pretty exciting. And I always send my nephew a little, he’s a big barbecue fan, a little snippets of what I’ve eaten and try and replicate it at home. But yeah, Austin is definitely one of the homes of great barbecue in the US for sure.
Sebastien Leitner
Yeah. Before we wrap up, I wanna go back to sort of a little bit of technology and innovation, and think about especially from your perspective on what are some of the things that you’re saying property managers should invest more in, and maybe some of the things that they’re investing in that they should maybe do less of, if that exists.
Gavin Gray
Yeah. Sure. I think that the pricing and the yield tools that we talked about previously are pretty essential to be competitive, but also to drive competitive advantage and success within the industry. So I think that there’s more to come from that as a tool whether it’s an off the shelf tool that is integrated into what you’re doing or certainly some of the property management software companies are offering some of their own tools in that regard. I think that’s vital and would probably put that as number one at the moment.
The other is messaging and guest messaging and the ability to communicate as a host with both guests as well as online travel agents like ours is also a pretty powerful functionality. In terms of maybe something that they’ve over indexed on, I probably find that a little bit harder off the top of my head to come up with a good example, Sebastian.
Sebastien Leitner
Yeah. And it may be very specific to the property or the location or the property type, etcetera. And to the guest preferences. I don’t care for the chocolate on a hotel room bed. I think that’s just weird.
Gavin Gray
I think in terms of some of those experiences, yeah, I think some of the more outdated ones are probably there for a reason. Right? But I think what great hotels offer has raised the bar for all of us when we go to a vacation rental. And what we used to be quite happy with or put up with is certainly something that’s quite passe and a thing of the past.
Wi Fi is a great example. Right? Wi Fi used to be almost like a differentiator going back a few years, and that was one of the filters that we would click on. Whereas now it’s just vital. Unless you really wanted to get away from it, you’re not gonna stay anywhere that doesn’t have some sort of decent connectivity like Wi Fi.
One thing that maybe we are starting to see is perhaps electronic charger points for cars. I see that as probably one of the newer amenities that we are seeing added to some of our filter lists. Because parking is a big thing for a lot of vacation rental travelers. And also to have charging facilities, I think, is something that’s being increasingly demanded.
Sebastien Leitner
That’s a great way of wrapping up the session. I mean, we have to work as an industry on sustainable travel. I think it’s something that is critical and seeing you embrace and making it available as a filter is helping with that because if you are giving a choice between a petrol car and electric car and the distances and the infrastructure is available, then why not choose that electrical car? In some cases, it’s even cheaper than the petrol car. For sure.
Gavin, thank you so much for joining me today. It’s been a pleasure having you on the program, having you share your insights, and the insights that you’ve gathered throughout your career. Look forward to seeing you in person at one of the upcoming events.
Gavin Gray
It’s always a pleasure to talk, Sebastian.
Sebastien Leitner
Gavin, thank you so much.
Gavin Gray
You’re welcome. Cheers.
Sebastien Leitner
Thank you for listening to the turndown. Don’t forget to subscribe and tune in next week as we discover new exciting guests.
