Vacation Rental Business Transformed by Internet

Vacation rentals are one of the internets fast growing success stories. The market has been transfored by the one to one contact only possible through the internet. Most vacation rentals are second homes owned by individuals and have traditionally been rented through local realtors or rental management companies. Except in some of the larger better-developed resort areas this meant limited market access. The internet allows homeowners to directly reach potential customers worldwide. This has greatly increased the market for these rentals, particularly those in less well-developed or less well-known locations. For the consumer the internet has increased access and choice. It is now possible to rent directly from the owner a house on Diani Beach in Kenya, a flat in London, an apartment in Paris, or a cabin on a remote salmon fishing stream in Alaska.

One example of such a success is Rob and Kate Hinchees beach house on Alligator Point, Florida. Rob and Kate chose Alligator Point because it was one of Floridas least developed and least know beaches. They purchased a beach house in 1992 and initially worked with a local realtor who specialized in vacation rentals. The remoteness and lack of development that attracted them in the first place worked against them when it came to marketing the rental property. In the first full year as a rental they made less than $5,000, with occupancy under 25%. In 1996 they began experimenting with internet advertising and by 1999 their rental income had risen to over $25,000 and 90+% occupancy. This allowed them to sell the house at a profit and purchase a larger nicer beach house, which they still rent today. The Hinchees advertise their property on a number of websites that specialize in vacation rentals and they also maintain their own website (alligatorpoint.org). The cost of this advertisement totals less than $500 per year. The Hinchees are not computer or internet experts; they have done all of the website development themselves, learning to work the internet in the process.

Success stories of this kind have benefited the consumer as well. Many people have discovered that for about the same price, sometimes less than a hotel room they can rent a house in an interesting vacation area. Alligator Point has no motels, condos or timeshares, so before the internet the average traveler would have had little or no way of knowing it existed, and no way of finding accommodations there. Once there many people prefer the privacy and comfort of a house and find the beaches much less crowded than those with more popular accommodations.

Vacation rental homes are usually listed on one of many commercial websites such as cyberrentals.com, nomorehotels.com, or gulfcoastrentals.com. The cost of listing sites like these vary but average about $100 per year. There are also sites like sunturtle.com that offer free advertising. These sites often offer help in setting up webpages and posting a few photographs. For customer contact the owner can usually link to their personal website or post a phone number or email address.

Consumers can surf the net or scan listings on one of these commercial websites until they find what they want. Some of the larger commercial websites have an impressive variety of listings worldwide for example at greatrentals.com a vacationer can as easily find a rental house in India or Japan as New York.

A growing number of people own second and third homes in interesting locations. Many of these homes sit vacant much of the year. Traditionally the owners had only limited options for renting these homes to others. At the same time vacationers options have been limited to resorts that are well advertised or accessible through conventional travel agencies. As a result of the growing vacation rental market on the internet both the consumer and the homeowners are benefiting by making many of these properties available through the one on one connection the internet makes possible.

Rob Hinchee
rhinchee@quest.net