The Vacation Rental Key with T and T

Episode 15: Greg Schulze reveals how Expedia is bridging hotels and vacation rentals to transform travel

• Tim

Share episode
SPEAKER_01:

You're listening to the Vacation Rental Team with T and T for the podcast for Vacation Rental Managers or by Vacation Rental Managers. I'm Tim Cafferton. I manage two companies. One in Virginia and one in North Carolina. And I'm one of the two teams.

SPEAKER_00:

And I'm the other team, Tiffany Edwards, born and raised in the vacation rental business. I help manage our family businesses from E. West all the way to Hawaii.

SPEAKER_01:

In the next 30 minutes, we're going to give you our keys to success test in the vacation rental business.

SPEAKER_00:

Welcome back to another really exciting episode. Tim, we have got a key noteworthy speaker today.

SPEAKER_01:

That's what you challenged us to do on the podcast. So we're actually in Austin, Texas, on scene here at the Explore Connect event that Expedia Group is putting on for all the folks who use Verbo, and we have a big catch today. It's Greg Schultz. Welcome, Greg.

SPEAKER_02:

Hi, Tim and Tiffany. It's so great to be with you here today. I am the chief commercial officer of Expedia Group. I have responsibility for bringing all of this great product into our marketplace, making sure that we have the best things for our travelers explore and to buy, and I work with our partners to grow their visibility in our marketplace through our advertising products as well.

SPEAKER_01:

You have been doing this for a while. I have it on good authority, LinkedIn, that you posted last month 20 years with Expedia. So this is not new to you.

SPEAKER_00:

I completely agree. And 20, 25 years ago, we were a very small part of the tourism sector and now to be integrated into the conversation of rental cars, flights, having a seat at the table, and a big part of that is all you guys have done.

SPEAKER_02:

It's a fantastic product, and travelers love the opportunity to connect together with their families and friends in amazing places on the beach and mountains, and we really enjoy working with our vacation rental partners.

SPEAKER_01:

Seems like travel preferences are really changing, maybe more so recently than ever. And you are looking at data all the time. What's the data telling you right now relative to travelers and their preferences?

SPEAKER_02:

First of all, people are out and about and really exploring our world. New places, we find that, of course, people still want to go see sites, the Eiffel Tower, but they're exploring new destinations as well. And that's where our vacation rentals really are fantastic because you're going on a trip with your family, maybe you hit Paris for a day or two, and then you go out into the French countryside and you find a great place to stay. And so we're seeing a lot of what we call these detour destinations where you take in a couple destinations at once. That's that's a really big trend for us. We also see people just wanting to get away and to maybe spend some more quiet time. And again, our vacation rental experience is has been fantastic for that, whether it's a beach or a mountain getaway, but just to be together with your family and friends.

SPEAKER_00:

Yeah, and I was actually just in a session that spoke a lot more about the JOMO. So before being FOMO, the fear of missing out, and a couple years ago after COVID, the bee leisure. So business, and you add in the travel, but now it's really about unplugging and finding those spots, which I do feel like the vacation rental sector can certainly help out with.

SPEAKER_02:

That's right. Joy of missing out. I love it.

SPEAKER_01:

I don't know that we indicated that you are actually in charge of Expedia's global supply and its advertising business as well. Talk to us about the marketing particularly, because Verbo has really hit a cord with people, I think, in the marketing strategy.

SPEAKER_02:

First of all, our core value proposition to travelers with Virbo is that we are a whole home. We have some amazing properties, really focused on those great leisure destinations with the opportunity again for you to spend the time together with your family and friends. And so our advertising really tries to highlight special qualities that our properties have. And so it's always amazing, beautiful visuals of the families and friends enjoying the time together. And I think that really does capture the spirit of the vacation rental industry.

SPEAKER_00:

And one of the ways y'all are doing this, so just recently announced the B2B. Can you talk a little bit about that integration and across the different platforms?

SPEAKER_02:

The great thing about Expedia Group is that it is a marketplace. And so while we do have an important brand in Virgo, and that has been the foundation of our vacation rental business, we are expanding into Expedia, our multi-product brand, as well as our B2B network. So we are giving our vacation rental partners more access to more demand. And really the thing that Expedia Group has done really well as a marketplace is matching travelers with the right demand. And so by using technology and the right data to ensure that we're presenting the right products to those travelers and then we're helping them make an informed choice. No matter where the demand channel is, whether it's in our brands like Verbo or Expedia or Hotels.com, or it's a B2B partner.

SPEAKER_01:

So many of our listeners are what we call partners. Starting to use the term host. I'm not a big fan, but that's okay. You understand they're providing products, some of that local strategy have. What would you tell those folks about what they can do? Maybe some action steps they can take to better position themselves to take advantage of these additional platforms?

SPEAKER_02:

First of all, whether you call them host or something else, we know that partnership is critical in our industry. It always has been, and it's especially, I would say, important in this space. And we have an amazing team of partner success associates who are out in the markets working with our property management company partners as well as hosts, and we're committed to helping them understand the different sources of demand within the Xpedia Group marketplace, whether it's more traditional Verbo or if you if you want to reach through Expedia or our B2B network. There are some things that are changing in this marketplace, and we're helping our partners through that and trying to offer more options. We are launching the Verbo Payments system, which allows for Expedia to be merchant of record, but it provides options, and so we want to make sure that our partners are always understanding what the different options will help them achieve in the marketplace.

SPEAKER_00:

And I wanted to ask, too, as it relates to kind of standing out and coming into the really full fold of the Expedia platform, how much of that in your data research of those individuals have not been exposed to a vacation rental market, or how many are just brand loyal to Expedia, maybe utilizing that platform to book some of those vacation rentals?

SPEAKER_02:

Expedia Group has a loyalty program we call OneKey. And there's more than 168 million members in the OneKey program. This platform, through Verbo or one of the other brands, allows our partners to reach directly into that loyalty program. And there's many different things that we do to merchandise the product well to that, including loyalty rates that we that you're able to offer through through the platform. So that's one important way that you can target specific travelers.

SPEAKER_00:

I want to go back to the merchant of record. So you talked about that you'll have options. Do you kind of elaborate on some of what that option or what that will look like? That's always a hot button topic. I know even from the regulation standpoint, but then also for a property manager to really understand. So do you mind just diving into that a little bit?

SPEAKER_02:

Sure. At the highest level, it's important for us to understand how the property managers will work within our system. And we've always tried to take a balanced view because we ultimately have a shared interest in delivering a great experience to a traveler. And so we really want to understand what it is that you're trying to accomplish or what you're offering that traveler and how we can facilitate that best. Sometimes it's important that you have the control over the payments and our merchant of records, sometimes it's better for us. For example, if Xpedia Group is merchant of record, we're able to better work with our loyalty program. We're able to distribute more easily through our B2B network. And these are increasingly important parts of this ecosystem. And so, again, we want our property manager partners to understand the trade-offs and provide the choice. And we think that is a differentiating quality in the XPD group marketplace versus our competitors.

SPEAKER_00:

Very much so. Greater benefit as a result of making those changes.

SPEAKER_01:

But to be clear, not to set off panic in the streets. This is not a requirement you are putting on the host of partners. Trevor Burrus, Jr.

SPEAKER_02:

It's not. It's technology that we are building and that we will make available to our partners.

SPEAKER_00:

The consumer has really been driven to that not only just the brand loyalty, but the rewards. And now that we've seen the financial changes, that people are really moving towards utilizing those reward points, and that's not something necessarily we can do in any of our businesses. So this is an interesting option then for many of our partners.

SPEAKER_02:

There's a few aspects of our loyalty program that I believe are really interesting for our partners. First, using data to target travelers and really being smart about the way you're positioning within the network using loyalty program data. And whether you do this through a seasonal type discount or a special rate for loyalty members, there's ways that you can target these members which tend to spend a lot more and are booking longer trips as well. We also have the cross-brand aspect of our loyalty program. So you can earn one key cash on Expedia when you buy a flight or you book a weekend trip in a hotel and then come to Verbo and use your OneKey Cash. Again, all funded by Expedia Group, but it's to the benefit of our partners and the traveler.

SPEAKER_00:

So y'all have made a very conscious effort to really focus on quality. You've gotten rid of listings that didn't necessarily meet the qualifications and create the experiences that you have had in trust and have advertised to your consumers. You have something else coming that you're going to focus a little bit, even more so, on creating that quality of trust and highlighting. Will you talk to some of our property managers that are out there where I feel like this program really would help incentivize those individuals and company?

SPEAKER_02:

Yes, and thanks for the question, Tiffany. It's important that our partners understand the premier host program, how they qualify, what it means. It's also really important for our travelers because we know that matching expectations with experience is what really drives repeat and satisfaction in travel. And so with the badge of a premier host, we want to make sure that that really means that the traveler should expect a high-quality travel experience. Historically, our Premier Host program allowed for a property management company to achieve the premier host for all of its properties, regardless of the quality of any individual property. And so we're shifting over time to a program that will evaluate each property individually and ensure that a traveler booking that specific property understands what they're getting in this premier host badging. And we think it's going to be great for travelers. It's going to drive additional demand to those properties. We also think it's going to be really important for our property management partners to allow for better coaching and improvements and targeted improvements on the properties. Because ultimately what we all want is for most of our listings to qualify. That means that they're a great experience and that travelers should expect really great things when they stay there.

SPEAKER_01:

So how are you going to do that? How do you know Mr. Smith doesn't want to replace that coffee maker?

SPEAKER_02:

Well, as you know, the uh travel preferences and how people respond does vary. And we believe that the qualifications that we have take into account some of that variation. And really it's about ensuring that marketplace trust, that the badge means something, and that we can stand behind it. And we want to make sure that we're providing the right data to our property management partners so that they can make improvements as needed, that they can address issues that the travelers might have had.

SPEAKER_01:

And so it sounds like reviews is going to be critical to this.

SPEAKER_02:

Reviews is a big part of it. And it's a lot of the basics, you know, ensuring that we have good acceptance and no cancellations. This is a fundamental part of not just that property, but for our industry to build that trust with travelers. It'll it will absolutely grow the segment if we do this well.

SPEAKER_00:

So we had an example in Kauai where one of our condo complexes decided last minute that they were going to do roofing and we had to move some individuals. There were a lot of complaints associated, we could not help it. How at that point in time, either if it's something that we can't prevent and we're doing everything we can to help with that guest experience, or you get a Karen who comes in and just loves her time back.

SPEAKER_02:

My mother's name is Karen. Okay, I'm sorry.

SPEAKER_00:

Okay, how do you know? I'll name it Jeannie. My mother's name is Jeannie.

SPEAKER_02:

No, actually, I think my mom uh wouldn't probably complain to How do you assess the what's a true bad review or something that's out of your hands? Right. It's an important question. And we want to have a program that has integrity for travelers and for our hosts and property managers. We have a robust system to review exceptions and ensure that we have proper quick evaluation and that we can address any issues with that. The idea is not to penalize anyone at all. The idea is to ensure that we're matching supply and demand properly. That's what a trusted marketplace is, allowing travelers to make informed choice. And so if there is an exception that's causing a data fluctuation, we don't want that to factor into this. It's not the the spirit or the construction of the program.

SPEAKER_01:

I am very intrigued by what you're doing with AI. Expedia is out in front on this. You are killing it. But there's also that human interaction. So what's Expedia doing to make sure you're balancing AI and all it's gonna do versus that human interaction on even the situation you just talked about?

SPEAKER_02:

Well, it's a great question whether it's today's amazing AI or technology going back to the to the beginning of the online commerce and online travel when I started, especially in travel, right? Because it travel is hospitality. It is a people industry, it's about connecting people, connecting people to places, and if we can use technology to enable that or to make it better, that's an amazing thing. And we don't want technology to get into in the way of that. I'm always telling my now adult uh children, put your phone away, like experience this moment, get a picture and then let's move on, because we are in an experiential industry, right? But I have seen over these years the power of technology to really improve the experience. And it starts with this selection and matching of the product with a traveler and and the the particular needs of that traveler. So I'm very bullish on AI in the travel industry. I think it's going to help us sort through all of the different information, the many options that you have in travel and ensure that we're getting that perfect trip. And vacation rentals are can be a tricky selection, right? This is not a I I need to go from Chicago to New York and I want to nonstop and you know, here's my 10 options, I'm gonna pick the cheapest or the one I have miles on or whatever. This is very much part of your vacation experience when you are staying in one of these homes. And so you really do want to know all the all that you can about that property, the community and the experience that you should expect at that property. So I believe that AI will help you do that. We're now using AI for to help sort through reviews and it summarizes reviews so that you can quickly see that. We have a QA tool now that allows you to search through all the data that we have about that property and AI's search. So there's much more that we can and are doing with AI, and uh I think it's gonna make travel better.

SPEAKER_00:

What can we do better at providing information regarding our properties to make sure that we attract or or can be pulled into some of that QA for those individuals that might be going into the Expedia app and we're integrated, but they may not necessarily know of our area or know the feeling of what they want to go to, but don't necessarily know how to get to one of us. What should we be doing to help elevate us to reach some of those consumers?

SPEAKER_02:

It's a fair question, Tiffany, and at the same time I would say we are very dependent on our partners to be successful in the way we present vacation rentals. And we can use technology, we are using advanced technology to do that, but we know that you know this property and the experience to expect better than anyone, and we want to make sure that that's what comes through. I'll tell you, we're always gonna keep trying technology that and some of it might not work perfectly. We had an experience with this product a couple years ago where we were using AI to select the hero image for our properties. And and we got a lot of feedback from the owners and from property management companies. Like, that's not the picture that represents my place and the experience that you should have there. And we adjusted, we pulled that technology, we took the feedback, and you know, we're really now trying to partner and to listen to our property management partners on how to do that better. AI and this advanced technology is really dependent on data. So ensuring that we have all the right characteristics of the property and that it's structured in the right way is really important, and our team is always reviewing that and I hope providing the right feedback to our partners.

SPEAKER_01:

And you really made a huge investment in data and systems over the last few years. How was that paid off for you?

SPEAKER_02:

It really started back as we combined a few of these companies together. We found the just that technology had become very complex and heavy and difficult to move fast, and so we took on this project to re-platform, and as part of that, it really focused on the data and structuring our systems in a way that allows us to innovate better and to move faster. It also, Tim, allowed us to put vacation rentals inventory on our other brands. Yes, thanks. And and that's that's been a that's been a huge advancement for our travelers, for our partners. It's enabled by that technology investment.

SPEAKER_00:

I just have to say, I know that we said the host and the partners, but I love that we continue to use the phrase vacation rentals. I'm true to that brand completely of vacation rentals. I think that's what we offer and supply. So I just want to say thank you to continuing to use the phrase vacation.

SPEAKER_02:

Well, now it's we're stuck with it because it's in our name. Yeah. But I would say it does distinguish our approach. It's not an alternative accommodation. We say very clearly at Expedia we're selling hotels and vacation rental. I really like how that captures what you experience when you're when you book on verbo.

SPEAKER_01:

So now we're going to get into a question you probably can't answer. Publicly traded company. One of the chief officers here. But first of all, I was struck uh when I was looking through the information. Expedia is a$13 million uh business. That was the size of the entire vacation rental industry just a few years ago. So congratulations to you for developing that product. But what does the future look like that you can address?

SPEAKER_02:

Well, I so remember I started at Expedia 20 years ago. Interesting bit of trivia. My first day at Expedia was the first day that we traded as a publicly traded company. August 1st, 2005. Before that it was part of Microsoft, and then it spun off, and then it was purchased by IAC, Barry Diller's company, and then combined, and then a public company in 2005. When I started, I think we were doing, I don't know, maybe 30 billion or so in bookings, and we're now doing close to 130 billion in bookings. And that growth has been incredible. It's been personally an amazing experience. But what's been most enriching for me is the chance to expand. I started, I was at American Airlines before for Expedia. I started working in our air business and to expand into the other parts of the business. And I've so much enjoyed working in vacation rentals. I find that these partners are more passionate about the business of travel than any other.

SPEAKER_01:

Good duck on that, by the way. But so where are we going to be able to do that?

SPEAKER_00:

You should have been more specific. What do you where will where will we be in a year? Sorry.

SPEAKER_02:

I forgot going on there so long, I forgot about what you asked, and I should write it down. So where are we going? Well, look, there's a lot of exciting things happening. We're talking about some of them this week at our conference here. And there's going to continue to be innovations in the product. We're expanding. I believe very strongly in the power of global growth for our brands. I lived in Singapore for five years. I currently live in London. And my hope is that the Xpedia Group marketplace continues to grow around the world, and that we're bringing travelers from all over the world into your amazing properties. The other really big opportunity for this category for vacation rental partners is to have more exposure through Expedia because we are doing a lot of work to make the experience for travelers who come to Expedia much better to help them find a vacation rental property. And really highlight the unique things about that property, what to expect, and even the operational logistical differences when you book a vacation rental versus a hotel. So all the communications are getting better and really exposing this category to a whole new set of travelers who hasn't shopped on Verbo or our competitors.

SPEAKER_00:

It's interesting because not too long ago it was hotels versus vacation rentals, and now it's the understanding, and I think we've all knew this, you still have the same traveler, it's just a different trip. And you're really targeting those individuals.

SPEAKER_02:

I'm a perfect example of that. I think many of us are where I really I'm staying in a hotel t today, and I look forward to a trip with my family where I can stay in a vacation rental. I in fact, I we went to a wedding a couple months ago with my family and had my in-laws there and nephew and all together in the same home, and that was great. But that's what travel's about. It's not one thing, it's it's everything, it's about exploration.

SPEAKER_01:

What didn't we ask you we should have?

SPEAKER_00:

Yeah, oh good one, good question.

SPEAKER_02:

But mostly just to see the passion of you all as owners, as property managers, and like I said, this is an amazing group of partners we have here in Austin.

SPEAKER_01:

Well, speaking of passion, we have a little segment we like to do. Our name little game, Quick Draw, where we ask you a series of off-the-wall questions to find out more about you. You can answer in a few words, or more wordy if you like. Okay. So start the clock.

SPEAKER_00:

From a consumer perspective, what's one thing everyone should be utilizing Expedia to do? Go on on, going in that's underutilized.

SPEAKER_02:

Expedia does some really great work on the destination as a whole. We have we're partners with destination management company, with local cities to really help you like experience more so we have activities and and then the way that vacation rental fits into that, I think is just perfect, right? Because it's it's more about experiencing.

SPEAKER_01:

You just mentioned your globe trotting. You've lived in North and South America, Asia, currently living in Europe. How many countries have you visited, Greg Schultz?

SPEAKER_02:

Uh, I can't say that I've counted. It's under a hundred, I know that, but it's close to it, probably. Although I I tell you, so I met Phil Kogan from The Amazing Race. I asked him that question, and his was like 140 something, which is just seems ridiculous. Something to inspire to. You might be close. No, I there there's a lot of the world that I feel like I need to still see. And I think that's one of the things about travel. The more you do it, the more you realize that you need there's more places to go.

SPEAKER_00:

Alright, then what's your favorite vacation spot?

SPEAKER_02:

I definitely like it all. I depending on the mood. Right now, I've been traveling so much for work. Right now, I would love a beach vacation, just quiet. I grew up going to North Carolina coast for vacations. And my wife's from North Carolina, so we we would always do a Upsile Island house and really enjoyed that as a um young family with our kids and grandparents and I think you already answered this earlier, but when is the last time you stayed in a vacation rental?

SPEAKER_01:

And how did it go?

SPEAKER_02:

I think if that was if the wedding was the last, it must have so ago. It was fantastic. It was in uh Virginia, beautiful home, had 30 acres that you could walk around, just uh one of those well-located you you could have stayed on property the whole time, but it we had it for this wedding, it was a perfect place to gather as a family.

SPEAKER_00:

First concert. I always ask that.

SPEAKER_02:

You know, into this I love this moment I love this question because it's true and very ironic. My first concert was with my sister. I was 13 or so, and we saw air supply. And um for the longest time I was the air supply guy at Expedia, and uh and so I just found that ironic.

SPEAKER_01:

But um Noah classic uh, so you are a Northwestern grad and a UNC School of Business grad. So who's your nemesis, Illinois or Duke?

SPEAKER_02:

Well, so I grew up in Ohio. My parents both went to Ohio State, and they just could not understand why I would Ohio, God forbid, a Big Ten school. There's always the Ohio State-Michigan rivalry. My wife is from North Carolina, her half her family's North Carolina, UNC, half the family's Duke. I went to UNC. I made my choice. Yeah, I I love the rivalries. Now I'm in in London and I'm enjoying the rivalries of European football. So it's uh it's a whole new thing.

SPEAKER_00:

Once one way that you use AI every day. Wow.

SPEAKER_02:

We have tools at Exputy Group that are built on AI that I certainly use every day. I'm enjoying, I pay the$20 a month to ChatGPT, to Claude, to Perplexity. And I think it's for me an investment in our future, understanding how these are developing. I think it's important for all of us. We're encouraging all of our employees need to have an AI goal. And so it's really been interesting to see everyone at Expedia Group, no matter what your job is, like going in and building agents and really trying to figure out how to use this more productively. It's all around us. So it's not any one thing, it's not just ChatGPT, it's it's really just how are we using technology and data to make things hopefully better.

SPEAKER_01:

My last one, something that's still on your bucket list.

SPEAKER_02:

Safari. If you're talking about travel, I have a lot of bucket list items, but if we if we're gonna talk about travel at Safari, and I am probably a week away from booking, we are going, my daughter graduates college next year because she's a senior, and uh, we're going as a family to Kenya. Very excited. You kind of hate to check off that last bucket list item for fear of being more. You can add more. I will add more for sure.

SPEAKER_01:

It's Greg Schultz. He's the chief commercial officer for Expedia Group. And we thank you so much. I was fantastic.

SPEAKER_02:

I really enjoyed talking with you.

SPEAKER_00:

Yeah, we appreciate it. Very, very much. Thank you. Keynote and Tim delivered.

SPEAKER_01:

All right. So long, everybody.