Vrbo’s Subscription Exemptions Are Secret. That’s the Story.

0:19Brandreth Canaley: Good morning. Happy Wednesday, the new best day of the week. I'm Brandi Canaley here with Michael Golden. Jamie is on vacation, so hopefully he and his wife are enjoying some kid-free beach time. How are you today, Michael?

0:36Michael Goldin: It's going to take a little adjusting to this Wednesday schedule. Mondays have been the best day of the week for six plus years. Allow me an adjustment period, but excited to kick off a new week in an expanded show.

0:58Brandreth Canaley: Yeah, it's definitely funny. And sometimes I plan my travel. I'll try to choose flights so I can be on the show, but then the flights that I had booked for this week and next week, everything is all wonky. But for the viewers watching, I am in yet again another location. I'm currently in a moving Mountains property in Beaver Creek. We just had a brand leader summit yesterday. So I'm bopping around lots of ping ponging around the country.

1:27Michael Goldin: The worst places to do brand leader meetings than Beaver Creek.

1:32Brandreth Canaley: So yeah, it's pretty snow yet. The mountains have a little bit of, there's a dusting on the top. So there's an air of hopefulness. I don't know. I, my family, my family ski chat is like just everybody's trying to predict where we should go where the snow is going to fall it's all everyone's becoming an amateur meteorologist well i'm sure ai will help people get better at that

1:59Michael Goldin: than yeah traditional meteorologists i don't know maybe who knows um the we a lot has happened since I've been on the show last. It hasn't even been that long. Verma was a lot of fun. I caught the episode last week, but I completely agree with you. The energy and there's two acronyms that just echoed across the halls over and over again, PE and AI. And it's brought a new a new breath of energy to the space, which is great to see. It's, you know, everyone is talking about how to implement AI and then should they sell to PE. So.

2:48Brandreth Canaley: The burning, the burning questions. Well, also a very big topic at Verma was all these Vrbo changes and we got into it last week, but in the week since there have been more updates And so it leaked that some Vrbo users might exempt some people from losing their subscription plans. This is a very small subset. And I think, again, it's important to frame that it has not been possible for new listings to be on those subscriptions for a while. This is something that they have wanted to get rid of for a long time. people might have a carve out for another year or maybe to the end of a subscription.

3:34Brandreth Canaley: But in Dennis's article, he talks about how people, you know, some people tried to get in and book, like buy their subscription at the last second and, you know, paid over$19 ,000 and then couldn't. And, you know, then their listings are suspended. I think that this is, I understand people are still trying to figure out a way to like, hang on to those subscriptions for at least a little bit. Sure. It's way cheaper. I get it. I get it. But I just, I think that we're, we're kind of past that point and there has to be, I think there's some concessions that have happened. Um, there's no longer the, um, the rate parity with your direct site, which I think was another real cause of uproar understandably for people.

4:16Brandreth Canaley: So now there's supposed to be rate parity with the OTAs. But I think an interesting point that you brought up pre-show that I don't really think we got into in too much detail last week as the content parody. And what's your take on that?

4:31Michael Goldin: In the new AI world, content is everything. That's what the LLMs are searching for. That's what the agents are searching for. So if your site has better content and answers the results that the agent or LLM is looking for, then it's going to cite you and bring that traveler or agent to your page or your booking engine. if the OTAs have the exact same content, then that's one disadvantage. You know, call it a level playing field for everybody. Then you have the rate parity levers to pull for now. But Verbo has signaled that that's a lever they're interested in pulling. They've walked it back this time.

5:21I don't know if that's permanent

5:23Michael Goldin: or if it's going to be changed again in the future. But rate parity is not uncommon for the OTAs. It's all over the hotel world. There are ways to get around it by having membership and loyalty like Marriott does, but non-public rates. But I'm glad they did walk back the rate parity for direct sites. What I think will be interesting to track is the content parity. How on earth are they going to get all the content from your direct booking site and cram it into an OTA listing? I'm sure you guys have local recommendations and places to go, maybe even discounts for tours and activities synced to your site.

6:12Michael Goldin: You probably have more images. You probably have branded images. You probably have content that you put into every one of your own direct site listings. that you don't share at the OTAs. So I totally get why they're asking for it. I don't know how operationally that's going to work, but I guess we'll find out. Some people will get angry about it and then we'll have more news to cover on that front.

6:42Brandreth Canaley: Yeah. Our director of distribution, Leah, was talking about the enforceability of a lot of these stipulations or parts of the contract. And it's like a lot of things were like, oh, we're not going to enforce it. And it's like, they might not enforce it until they do. And then they can point back to your contract and say, we're going to do this.

7:05Michael Goldin: They have the right to downrank you as well. You're still listed on the site, but maybe you don't convert as much if you don't play by all the rules they want. I think the outroar on the subscription and the moving to the 12 % commission, the writing's been on the wall for a long time. They're getting more to par with their counterparts, Airbnb and booking. So I wouldn't be surprised to see more and more moving in the direction of just a similar way of doing business with Airbnb and booking. But, you know, Verbo has historically been the partner-centric OTA. And, you know, I think now it's moved a little more in the direction of one of the others.

7:58Brandreth Canaley: So, yeah, I think there's a point that someone made on LinkedIn. I think Dennis from Cassiola that it's all it's also just how fast some of these changes are happening and they come out of nowhere. And so if everyone can agree, like, yeah, it makes sense. They're moving to be on par with other OTAs. it's just this feeling that now there's so much change happening all the time. It can happen in a blink of an eye. You have like a standard 30 days that I guess is like contractually obligated, but still like that's not enough time for a business, an industry like ours to pull the levers that they need to pull and that the changes keep feeling like they're happening constantly.

8:38Brandreth Canaley: And that's just a jarring way to run your, it's, it's just, it's unsettling.

8:42Michael Goldin: I got news for all the operators out there. It's going to get worse before it gets better. The whole advent of AI and AI distribution and how demand has changed, search has changed, and even booking has changed. It's going to cause the OTAs to make changes to make sure they remain important and relevant and part of everyone's booking mix. and so I would suspect and I would advise everyone listening to just hold on. Things are going to continue to change not just with Vrbo but with Airbnb. We'll touch on some stuff there in a minute and booking.com. It is the wild west right now. I wouldn't be surprised to see maybe some of the LLMs start to take pieces of transactions as pseudo top of file or OTA.

9:44Michael Goldin: So get ready to adapt your business a lot. Just be ready for it. Was that at all part of your leadership discussions yesterday, Brandy?

9:55Brandreth Canaley: About adapting? Yeah, I mean, there was a big section on distribution and the Vrbo, like this whole part and how do we help the brands prepare for this change and they're doing a lot of work together to figure out what to do with rates and everything. But then there is this feeling, all these changes that are happening technologically, how do we adapt our business around that? I think a lot of people are having those conversations.

10:23Michael Goldin: Yeah, there's a lot of tools that are extremely useful now, but rolling them all out at once is hard or impossible. And then you also want to make sure you're measuring success the right way. And there's loads and loads of AI tools that now can do 50 things that maybe they only used to be able to do one. And so evaluating tech stacks must be a challenge for operators now too.

10:54Brandreth Canaley: Currently in the process, we're always evaluating the tech stack that we have and And it makes it like, you know, week to week, you could be like, okay, like what we talked about a couple of weeks ago in the beginning of this analysis is now irrelevant or has changed. So, yeah, it's definitely I can understand the fatigue the operators are starting to have or maybe have had where there's just seems to be like a rolling, you know, maybe you're in a market that got hit by a hurricane or a wildfire. So you have like the natural world is throwing things at you. And then how do you have like partnerships or relationships with your distributors are now changing seemingly out of the blue and you have different operational.

11:37Brandreth Canaley: Like I it's it's a there's definitely I can understand a sense of fatigue. So I hope like, you know, we touched on it last week and a little bit this week about the energy that we felt at Verma and how that was a positive and a change from last year. So hopefully people can use, like find a way to keep some of that momentum, even when there are like a lot of these pretty big changes heading their way.

11:59Michael Goldin: Yeah. And the speed, the rate of change, plus, I mean, the lack of snow in a lot of markets last year, we've already seen some hurricanes hit the Gulf this year. There's another one coming in the mid-Atlantic now, it looks like.

12:16Brandreth Canaley: Don't say anything.

12:19Michael Goldin: The uncertainty and rate of change is a reason that joining a private equity company might be more attractive now than several years ago. So I'm fascinated. Some of that's timed quite well for the PE groups, but there's a lot of them out there. There's a lot of competition.

12:41Brandreth Canaley: There's some good ones out there.

12:43Michael Goldin: There's some rising stars, right?

12:46Brandreth Canaley: um but uh speaking of um otas we had some changes not necessarily bad changes to airbnb um but dennis's article um is about airbnb's dynamic pricing tool that they launched and the con the question is like are they trying to become a hotel-like franchisor and i kind of want to separate these two things first so the dynamic pricing tool i think i mean we wish we had jamie I'm sure he would have some spicy opinions. I don't think anyone should be using Airbnb's dynamic pricing tool to get the best rates for their business. But then those are the prices that Airbnb is trying to dynamically price to Airbnb's benefit.

13:28Michael Goldin: Sure. I doubt there's any professionals that use it. This is certainly a tool aimed towards the long tail of hosts. And they've built out a lot of the skill set for the long tail hosts to be able to compete and to be better and to professionalize. So this is a natural one. I mean, to be quite honest, I thought they already had a pricing tool, but I guess it was a They have a pricing tool. Not dynamic, not actually truly dynamic. So Airbnb is set to make more money by pricing things better. You lower the price, occupancy goes up, you raise the price, Airbnb's cut goes up. So they're winning either way.

14:14Michael Goldin: Where they lose is if there's just a mismatch of price and expectation or demand. And that's what they're trying to solve. then moving the needle there a few percentage points is a ton of money for for airbnb so i get it i i don't personally think this is a um a move towards becoming more like a franchisee or or a soft brand um well it's interesting to to talk about an interesting war game of how that would look and shape. I don't see it ever being the case that Airbnb will help distribute their inventory into other OTAs.

14:57Brandreth Canaley: Yeah. Well, I also, I think there's like the concept of, especially these hosts that are, you know, only on Airbnb. And this has already kind of happened, not like officially, but in the zeitgeist in popular culture, people call short-term rentals airbnbs like there are like our industry has already been soft branded as airbnbs so they already kind of have i mean it's not obviously there's no traditional agreement but um it already has kind of happened to some extent and people who very much identify as being airbnb hosts like they have that kind of loyalty um and they're not distributing on other otas but i agree i think it would be crazy if Airbnb was distributing Airbnbs to Bookie.com.

15:45Michael Goldin: If I have a single house, Airbnb has made it very easy to stay in their ecosystem and not add complexity by having my own direct sites and being on other channels. They've done a great job at that. Uh, is that the best financial move for individual homeowners? Probably not. Um, your former colleague, Doug Truitt stated that even, even individual properties see a good benefit to being on a good distribution mix, but it makes it easy. It's the easy button and people like to hit the easy button, especially if it's not their full-time job, they're managing their house while they're fully employed.

16:32Michael Goldin: They just want to cover mortgage or rent or whatever it is. And, um, everybody keeps giving them tools and, you know, nothing, nothing for me on throwing shade at Airbnb on this one.

16:49Brandreth Canaley: Ah, no fights. I mean, it's not really that it's not, uh, this isn't like a super spicy topic. I think it's an interesting exercise, the franchisee, you know, question, but I don't think that that's very likely. And in this really great article that most of the people interviewed are also like, yeah, I don't really see that happening. But we might be seeing... Oh, yeah. Sorry.

17:10Michael Goldin: Other Airbnb news are updates to house rules. And again, I think this is probably more focused towards the long tail hosts than the moving mountains because I don't know, maybe I'll ask you that. Do you ask your guests to take out the trash and to do their dishes and to strip their beds?

17:34Brandreth Canaley: No. And, um, I mean, I think it's always as I think it's nice if you load the dishwasher and run it and, you know, make sure the house isn't like totally annihilated when you leave because people, real human beings are coming in to clean after you. Um, and I think that's just being like a good person, but I, yeah, the it's, it, this always kind of, when I see things, this like will pop up occasionally in maybe like a podcast I'm listening to or something I see on Instagram. We're like, Oh, I'm like this crazy list of things that my Airbnb host made me do. And I was like, are we still, that just seems like, so, I don't know, five, 10 years ago where the host was like completely renovate the home before you leave.

18:18Brandreth Canaley: Um, you know, I just, it's, if you're still doing that, that seems pretty, pretty crazy.

18:23Michael Goldin: I remember the first time I ever booked through Airbnb was, I think it was 2012. And the host asks or required you to bring your own towels and sheets.

18:37Brandreth Canaley: So that's a relic of the traditional, the early days of the vacation.

18:41Michael Goldin: The early days. So, you know, bringing that stuff on a trip is, is vastly different than asking you to put some dishes in the dishwasher right like yeah yeah stripping the beds is probably uh that starts to feel like work but like putting dishes away is kind of humanity i don't know i yeah totally fine with these house rules makes it better for guests uh travelers and it makes homeowners and managers also like do what they're getting paid to do You're paying a cleaning fee, a cleaner, as long as it's not egregious, like don't trash any houses. It's certainly not what I'm trying to imply here. But you're paying someone to come in and clean after you.

19:33Michael Goldin: And that's okay. Yeah.

19:36Brandreth Canaley: I mean, I remember seeing some truly ridiculous rooms, like people just trashing it. And then when we would charge them like an extra cleaning fee, they'd be like, I already paid the cleaning fee. And it's like, no, paying a cleaning fee does not give you carte blanche to just destroy a unit like that. It means that someone is coming in to like vacuum mop, do the dishes, clean, like turn the beds, tidy up. Like they're not there to scrub things off the walls and remove, you know, egregious amounts of trash. It's, you know, so. Yeah.

20:11Michael Goldin: Yeah. Well, another, uh, I don't have any knock on Airbnb on this one. It's good. I think it's good for the whole ecosystem. It's good for, um, travelers of course, which is why Airbnb is doing it. And they, that's one of the knocks that pop culture has against Airbnb is you, you check out and then you get a laundry list of things that you have to do, uh, to avoid a fine or a poor rating or whatever it may be.

20:38Brandreth Canaley: So, yeah, it's, um, it's, this is a slight tangent, but this came out of our, uh, talk yesterday, but we were talking about like the Airbnb traveler and some brands see like a difference in the, you know, traveler profiles in between the different OTAs. And then also getting people to book, like, you know, if they have in home, if you book here, like book while you're in stay for your next day, you get X percent off. But some people just refuse because they're going to book through Airbnb. And I was like, yeah, I mean, I get it because I'm even in this industry. And if it's not a reputable property manager, if I can't find a direct site, like I've booked 50, 60 trips on Airbnb in my lifetime.

21:26Brandreth Canaley: It's all in one app. I've been on Airbnb since it started, you know? So, um, it's just, it's really interesting. Um, they, even someone who likes to get out of the ecosystem and supports managers when there is an actual website to go book through, they still get you in there. They still, they still, they managed to keep you in your, I know that you're looking at me like that, Michael, but, um, like I said, if there's a direct site, I book there, but if I'm booking on an OTA, it's probably going to be Airbnb. Okay.

22:02Michael Goldin: Interesting. All right.

22:06Brandreth Canaley: We'll move on. Yes. Our last story for today is kind of an upsetting one. I'm sure people have seen this in the news, but there's huge protests all over France and they started off as student protests that are protesting the quality of the schools and kind of this generational discontent with the opportunities that are afforded to young people and the cost of living and all of these things. And unfortunately, kind of peaceful protests devolved into very large riots across the country. And the Louvre is closed. There's many smaller towns have been significantly vandalized. And this is obviously having an impact on people that are traveling there.

22:57Brandreth Canaley: So just look out if you have a French vacation planned in the next month. Yeah.

23:03Michael Goldin: Well, it is not limited to just France. Apparently there's protests in Portugal, Italy, Belgium, Spain, Albania. So it's bled into neighboring countries as well. Good news is it's not peak travel season. Bad news is, is anytime you see historical buildings on fire, it pains me.

23:29Brandreth Canaley: I know. I know. And although some good things I did see, I forget, I think it might've been a clip from the BBC, but how people in Paris were going and like cleaning up the fountains and there were some people trying to rally together, you know, to, to restore something, some sort of some order to the city. Yeah.

23:52Michael Goldin: I mean, anytime there's massive protests and uncertainty, naturally people change their travel plans. So we'll have to have Jamie pull data on the impact of future bookings to particularly France, but all of the neighboring countries we just mentioned that things have bled into. There's been trains, train lines stopped. They've closed metro stations your key landmarks so it uh it's nothing you want to see and peaceful protests great burning things not great so as a tourist i mean i there was a uh video i saw you know everyone was dressed in black with their masks on and everything and then there was this couple with like a pink shirt and a yellow shirt just walking down the middle of the road with their luggage like nothing else is going on.

24:48Brandreth Canaley: So oblivious travelers. Yeah.

24:52Michael Goldin: I mean, look, if you're in the hotel, it's right next to all of that. Probably check out and go somewhere else. But it was quite the contrast there. Yeah.

25:02Brandreth Canaley: The it's the interesting thing about I mean, we've talked about this when there were incidents in Mexico that but anytime that there's negative news, it has it remains in the psyche. I feel like for like at least a year when you're booking travel because these are kind of like booked further out these long longer booking windows and you even see that in snow markets when they're like this also was a topic yesterday how like last year a lot of the mountains were like perfectly skiable for 90 percent of people who are coming to ski on their like once a year vacation and they're like beginner to intermediate but then you see you know you see the news and it's like there's absolutely no snow and you see an instagram video of someone going over like on a lift and it's dirt underneath them and then it impacts what people are going to do.

25:48Brandreth Canaley: And then it also impacts the following year. Like do, you know, people are trying to figure out people, meaning some people like my family are like, where is, where is like the highest likelihood of snow, which is, I mean, it's, I think it's sometimes a, a, a futile mission to predict those things, but these kinds of events, whether it's natural or political or, you know, can have a, a serious impact on future bookings for quite some time.

26:13Michael Goldin: Yeah. And even if people are still traveling there, then the booking windows have changed dramatically, right? For sure.

26:21Brandreth Canaley: It's last minute.

26:22Michael Goldin: If I'm supposed to be going to Paris for Christmas, like, okay, I might wait to book that trip and then let's see how it pans out. So last minute travel rises. And I mean, we've talked about this on the show many times, maybe some of the big markets, maybe people need to go and explore some of the smaller European markets. And I don't know, maybe this helps people explore new areas of, of Europe, um, as a silver lining, uh, Pollyanna comment, but it's, uh, it's true.

27:00Brandreth Canaley: It pushes travelers elsewhere. When you have, if you have, you know, a hurricane event in the Gulf, people go to the Outer Banks or Hilton Head or, you know what I mean? Like if just people are still, there's still the demand for travel. It's just going to migrate around. Yeah.

27:15Michael Goldin: A hundred percent.

27:17Brandreth Canaley: Well, it is great to have you on the show where I, we haven't had all three of us on in a minute, but it was great to see you. What do you have going on this week?

27:29Michael Goldin: Conference season is largely over. So I'm excited for the next couple of weeks at home before the holidays start and then things get wonky again. But excited to digest all that has happened in the past month or two. It's been a whirlwind already. But yeah, nothing I can't say same old, same old, but nothing crazy. What about you? On the road again?

28:03Brandreth Canaley: I'm going home today and then next week going down to Prime in Anna Maria Island. So get some sun. I'm so excited. Yeah. So lots of travel these days, but it's all good. It's all fun.

28:21Michael Goldin: Are you becoming a loyalist in airlines?

28:25Brandreth Canaley: Well, that's the thing. So when I come out to Colorado, it's United. And then when I go down to Florida, it's like usually JetBlue, maybe Delta. But I mean, this is another episode in itself, but your miles that you're earning doesn't mean anything anymore, right? Like with your actual trips, it's like, what credit card do you have associated with this airline? That is how you're getting the status. I don't know how many trips to moving mountains I would have to do to get any sort of upgrades on united yeah well enjoyed it the wednesday is going to take

29:04Michael Goldin: a little getting used to but uh appreciate everyone tuning in yeah and we'll see you all next week

29:29you