Vacation rentals are rapidly becoming the most-talked-about part of the travel industry – for consumers, they are a great product; for the owners, they are a revenue stream; for the established hotel industry, they are shaking things up.

NB This is a viewpoint by Erik Engel, CEO and founder of NextPax.

And the current prominence of the sector represents a great opportunity for the entire technology and digital ecosystem to innovate, to learn and to make some money.

Many in the sector see themselves as disruptive, giving the impression that the insight from the traditional hospitality business has been rendered meaningless overnight. And while there is an element of truth in that some parts of the established order need to be scrapped, there are some constants as well.

Distribution dynamics

In a previous post I talked about the importance to vacation rental owners of ensuring that their technology partners were fit for purpose and that each understood the needs and demands of the others.

But further down the funnel there is an equally important conversation to take place and that is the relationship between the consumer and the technology partner. At the risk of oversimplifying, vacation rental owners need to know that their technology partner is working with points of sale that are doing everything to ensure that properties are presented in the most bookable way.

At Nextpax we work with a selection of distribution partners and have preferred partner status with Booking.com, the world’s biggest online seller of rooms, and HomeAway, part of Expedia Inc.

We know that these businesses spend hundreds of millions of dollars on the consumer-facing side of their operations – marketing, branding, support and technology –  and our owner clients can benefit from that scale and reach.

But we also give our clients options other than these global giants and are constantly looking for new partners. As an example, we recently signed two deals with Pyton, an Amadeus company, and with Peakwork allowing our owners to opt in to having their inventory made available to their users.

The important thing here is that Pyton and Peakwork users are different from NextPax users.

Pyton develops custom-made, easily accessible internet booking engines for online travel agents, tour operators and other travel product suppliers. This deal means that our inventory is now part of what they can offer to their clients.

Peakwork has its own proprietary distribution software which our inventory feeds into, and which it then licenses it to tour operators, wholesalers and airlines.

Making our inventory available for online travel agents and tour operators opens up yet another potential goldmine for the vacation rental sector. That’s the idea of creating formalised package holidays by bundling vacation rental accommodation with a flight in a single transaction.

For owners this creates a certainty around cancellations (if the family has booked the flight at the same time as the property, they are less likely to cancel), visibility on forward bookings (package holiday customers tend to book in advance) and greater flexibility on margins and yield.

The integration of vacation rental properties into the systems of real-world and virtual tour operators could be the next big step forward for a sector that is already on the march.