In a strategic move to carve out a significant presence in the vacation rental market, Vrbo, a subsidiary of Expedia, is launching an aggressive advertising campaign aimed directly at distinguishing itself from its main competitor, Airbnb. Expedia has announced plans to allocate an unprecedented budget for marketing efforts this year, with expectations from analysts suggesting a figure around $7 billion, according to Bloomberg.
Vrbo’s marketing strategy includes a series of sharp, witty advertisements that, while not naming Airbnb directly, clearly target the types of unique and sometimes unconventional accommodations that Airbnb is known for—ranging from farm stays to futuristic dwellings. This initiative builds upon a previous campaign that highlighted Airbnb’s practice of offering shared spaces, contrasting it with Vrbo’s guarantee of private, whole-home rentals.
The question arises: why the hefty investment in marketing? The answer lies in the competitive dynamics of the short-term rental industry, where Vrbo is currently trailing behind Airbnb. With approximately 2 million listings, Vrbo falls short of Airbnb’s 7 million, narrowing its revenue-generating potential. Bloomberg notes that the two platforms cater to somewhat different market segments: Airbnb is known for its shared home options and strong presence in major cities, whereas Vrbo specializes in premium, entire-home rentals in vacation hotspots such as beach and mountain locations.
This differentiation means Vrbo is less likely to be the go-to option for short, business-related stays in large urban centers. However, this focus away from city centers offers an advantage in navigating the complex web of regulations that cities often impose on short-term rentals, a challenge Airbnb frequently encounters. Moreover, Expedia’s other brand, Hotels.com, already competes in the urban space, allowing Vrbo to concentrate on attracting vacationers to its exclusive listings without the need to directly confront Airbnb in metropolitan areas.
Through this significant marketing expenditure and its cleverly pointed advertising, Vrbo is making a strong play to increase its share of the vacation rental market. Despite these efforts, Airbnb remains a dominant force in the industry, holding a significant advantage with its extensive list of properties and diverse offerings.