Private accommodation could be the savior for online travel agencies and other accommodation providers, as brands look to find a reliable route out of the COVID-19 pandemic.
Expedia Group, in an unscheduled financial filing yesterday, says its Vrbo brand is the largest contributor to gradually improving booking behavior.
The private accommodation unit within the group, which was part of a rebranding effort in June, is experiencing significant increases in gross bookings year-over-year in both May and June, the company says.
In what may now be considered a timely move, Expedia Group is getting rid of the HomeAway brand in the U.S. as the next phase in its efforts to simplify the branding of its vacation rental portfolio.
Beginning last week, users of the HomeAway website in the U.S. were redirected to Vrbo.com, and users of its app were asked to download the Vrbo version. In March 2019, Expedia Group rebranded VRBO to Vrbo.
Expedia Group says the uptick in private accommodation bookings is due to the brand's "strong inventory position" in whole-home properties.
These are particularly helpful in destinations that are popular for "drive-to" travelers, rather than those where visitors arrive by air.
Early signs carry warning signs
Expedia Group says overall lodging was down around 45% year-over-year in June - a sizable improvement on the 85% slump that the group experienced in the second half of March as the travel sector effectively shut down for business on a vast scale across the global.
The company says: "After a significant increase in cancellation rates during late March and early April as COVID-19 spread globally, cancellation rates moderated and have remained stable through June. Cancellation rates, however, remain higher than pre-COVID levels."
While it's too early to come to any sweeping conclusions about the role private accommodation might play in the coming months, Vrbo's early successes (alongside Airbnb's recent disclosures) indicate that, in terms of domestic travel, the sector could lead a lodging comeback.
The most recent disclosures from the hotel chains (also perhaps reflected in Expedia Group's signal that private accommodation is leading the charge) were that occupancy levels are, in many cases, still low.
In early-June, Marriott International said its hotels that had opened had "crossed the 20% occupancy threshold" and the best performers were those that are most dependent on drive-to business.
Still, the private accommodation sector faces challenges.
Airbnb-backed Lyric is said to be in a difficult position, and Stay Alfred has now shuttered operations.
Expedia Group, which straddles both forms of lodging, warns that it is too early to ride on the resurgence in bookings.
"Despite the recent improvement in booking trends, it remains difficult to predict the duration of the impact from the virus going forward, and there continues to be ongoing risk, including if there is a reacceleration in COVID-19 cases that leads to further travel restrictions," it says.