A travel industry shakeup: Vrbo gains market share, while Airbnb tries to break from Google

A travel industry shakeup: Vrbo gains market share, while Airbnb tries to break from Google

With the COVID crisis cutting deep into the travel industry’s bottom line, unexpected shifts are taking place. Airbnb has surprised analysts by taking this time to experiment with a new ad strategy. Namely, they not spending their usual hundreds of millions of dollars on Google Ads, and are instead looking at other options. 

That strategy has yet to go into full effect, but is being introduced at a quite delicate time. Hovering over all of this is Airbnb’s long-awaited IPO, which could come very soon. Meanwhile, Airbnb’s booking numbers are recovering overall, but slower compared to competitors. 

Most of those competitors, like Expedia-owned Vrbo (short for ‘vacation rental by owner’), continue to make use of Google Ads. Both because of their commitment to this established way of advertising, and because they specialize in more exurban and rural renting options, Vrbo saw their bookings recover by 61% in June. This stacks up very well against Airbnb, whose booking dipped by 15% over the same period, according to SimilarWeb and The Information. Other sites Booking Holdings also beat out Airbnb in growth over that period, again by sticking to Google Ads. 

Furthermore, Thinknum’s data shows Vrbo picking up steam in application downloads. June 23rd, 2020, marked the date when they passed Airbnb in rating count on the App Store. Since then, they’ve only jumped further ahead. At the time of writing, Vrbo’s app has 525k ratings compared to Airbnb’s 478k.

Airbnb wants to be its own traffic machine

In a company-wide email, CEO Brian Chesky told his employees, “We will become a brand that generates traffic. And we’ll focus on launches to announce innovations, capture our customer’s imagination, and generate press and attention.” 

Chesky gave this directive the week after CEOs of America’s Big Tech giants, including Google’s Sundar Pichai, were called into Washington for an anti-trust hearing. Multiple members of the congressional subcommittee accused Google of being an ad-selling and internet search monopoly. Chesky’s new vision for Airbnb traffic shows a conscious plan to get out from under Google in both departments. He wants Airbnb to take web traffic and advertising into his own hands. 

This strategy is in its early days, but might be achieved partially by building out homegrown features like Airbnb Newsroom – the company’s blog and resource hub. There is also apparently at least seven podcasts that cover Airbnb exclusively. It’s not much yet, but it’s a start.  

Vrbo is sticking with Google 

In a recent statement, Expedia CEO Peter Kern said Vrbo “the strongest part of our story.” As other sectors of Expedia’s business flag, we should expect the travel giant to put a bigger portion of their resources behind Vrbo. This includes bigger ad buys.  

The travel industry has always depended on Google for growth, and Expedia is sticking to its guns through the crisis. Vrbo has nowhere near the brand recognition Airbnb has, so this could be seen as a necessity. Despite everything, Google still provides opportunities for smaller brands to steal some market share.

Our data shows that Vrbo’s reach is growing across the internet. Vrbo’s quarter on quarter growth percentage across all social media has spiked several times in the past few months, while Airbnb barely grows at all. This is reflected in Twitter follower count, as Vrbo can most likely thank Google Ads for funneling users to their pages.

Do not expect Vrbo’s impressive performance to shake up Airbnb’s IPO, or anything that drastic. They are still the giant, bestriding the entire world. However, do expect to hear more from Vrbo.  Those who still can afford to travel will be drawn in by beautiful, well placed Google Ads featuring panoramas of nearby countrysides. They will be made to realize they need to escape, via Vrbo, into nature.

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