GMH Bonus: Vrbo’s Tim Rosolio on AI, Supply Boom, and the End of Easy Money in STRs

In this Good Morning Hospitality, A Skift Podcast Bonus episode, Brandreth Canaley and Michael Goldin sit down with Tim Rosolio, VP of Vacation Rental Partnerships at Vrbo/Expedia Group, from a standout “Vacation Rental of the Year” property in New Hampshire.

Tim breaks down what actually drives performance on Vrbo today, from must-have amenities and pricing strategies to the growing importance of quality, consistency, and reviews in an increasingly saturated market. He shares why the short-term rental “gold rush” is officially over, and what operators need to do now to stay competitive.

The conversation also dives into Expedia Group’s broader strategy, including the rapid growth of B2B distribution, the expansion of vacation rentals across Expedia’s ecosystem, and how new tools like promotions and sponsored listings are changing visibility and bookings.

They also tackle AI in travel, where it’s already delivering value, where it’s overhyped, and why the human element still matters in hospitality.

This episode is brought to you by Vrbo. Learn how you can earn ⁠⁠⁠OneKeyCash⁠⁠⁠ today.

Watch This Episode Transcript of This Conversation

This transcript is generated by artificial intelligence.

All right, Tim, well, we are in snowy New Hampshire. Yeah, tell us why. Well, I mean, this is the vacation rental of the year.

1:08

Why This Rental Won

We got these in every nook and cranny of the world, eight different countries, 80 different houses. And we really tried to highlight the depth and breadth of types of homes that are available in the vacation rental industry.

And we sell like crazy on Vrbo.

I loved this, this was in my neck of the woods.

1:26

How Vrbo Picks Homes

I feel like when you get ski vacation highlights, it’s usually Colorado. So I love seeing the Northeast represented and easy drive from Boston. So didn’t hate that either.

Plus I got to have clam chowder last night.

Exactly.

I don’t want Colorado clam chowder.

Where have those clams come from?

You know?

Plus they sound good. Rocky Mountain oysters. So we got a nice tour from the owner, walked out on the ice, which as a Southerner, I’ve never done in my life.

A little scary. Did you talk about liability insurance? Well, I did ask what kind of insurance coverage they had.

But what, from a Vrbo perspective, makes this home jump out? Yeah. So let me tell you a little bit about the process for how we choose these homes.

So first, out of over 2 million vacation rentals, it starts with a data-driven exercise. It’s like this is a home that has absolutely consistently gotten five-star reviews. This one has 78 of them, you know?

No small feet?

Yeah, exactly.

It’s hard to do that at scale. You’re always going to have someone that’s like, I’ve decided I’m in a bad mood, it’s a four.

Yeah.

But this is clearly a five-star, obviously never had a cancellation, and we will look down that list.

2:35

Hosts Who Go All In

But then from there, this is a great opportunity where we leverage my team of about 250 global account managers. It’s their job to understand the markets and the homes.

So we tell them out of this list, tell us about someone, and they then pick the homes that were memorable over their account management experience. Then there’s a process of like, it’s not just about the house.

We then have members of our staff that reach out and get to know the host a bit because we want to make sure it’s not just about the home, it’s about somebody who really is passionate about hospitality.

Yeah. What I think was really impressive is downstairs, there are so many pairs of cross-country skis, snowshoes, a snowboard, there’s all these canoes, the toys are here. My initial thought was like, oh, these must belong just to the family.

He’s like, no, everybody can use these. As a professional property manager with managing hundreds or thousands of homes, that concept is crazy.

I think that that’s also why these smaller managers provide a great experience because there’s seven pairs of snowshoes downstairs, the whole family can go out on the lake.

I’d be interested to hear your perspective on why we couldn’t have a professional manager. Sure, there’d be a cost to doing that, but if you had somebody that was locking in a commitment for a number of years to do it, I don’t know.

I was like, how have these not been stolen yet? We had people take blenders and toasters and the salt and pepper shakers that aren’t even the fun little virgin ones that say, stolen from virgin, they’re just regular salt and pepper shakers.

The thought that people are so trusting of their guests, and that also speaks to the kind of guests that’s coming here.

It’s like really enjoy nature and their group that they’re coming with, and they’re not stealing your Nordic skis, I think is great.

I think he, from what I gathered, David, the host, is pretty thorough with his house rules. There is a conversation that happens with every guest to make sure that they’re going to treat them.

I would need someone to explain, and he did explain all of those to me, like these are the skates that are meant for this. This guy is from Alabama. He’s probably got any fishing rods.

I guess he does have fishing rods. I would love to go ice fishing. That’s a fun experience, right?

What’s not to like?

Yeah, ever the host, he wanted to show us the lake, and I was in, all of my gear was upstairs, and he just showed up with a pair of boots. He’s like, I have other boots for you, and we walked right down the lake.

It’s very clear that hospitality is a part, not only of his journey with Vrbo in this home, but also part of the home. Everything in this experience is top tier hospitality.

What was so cool, I felt like was when the team first told me that, he’s an MIT professor.

5:22

Amenity Must-Haves

I’m like, okay, so it’s going to be super high-tech, and that’s actually not the vibe, I mean, it’s got the stuff you need.

But then when I met him and he was talking about, my inspiration was when I was a kid, I liked to go to camp, and I wanted basically high-end camp for families and groups, I was like, that makes total sense, sold.

And he nailed it with location-specific amenities that wouldn’t make sense in a house even across the street or three blocks down. So on the amenities, this house has all of the toys.

But more broadly speaking with Vrbo, what are the top amenities that if we don’t have them in our houses, you should consider? Yeah, I put it into two different categories. The first category is you probably have it, you just need to disclose it.

And that is Wi-Fi, washer, dryer, air conditioner, like there’s a distinct there’s a I mean, yeah, but you’d be surprised how many people, for whatever reason, forget to check that.

Yeah, I think it’s a given.

And then you’re just those those amenities travelers are looking for and using as filters so frequently that, if you forgot to do that, you’re going to not show up in the majority of searches. And that’s a problem.

Then I would think about the key amenities I would think of as are somewhat location and seasonal. So, if it’s the beach or if it’s warm weather, pool is always a really key one. Like it’s one of the most highly used amenities.

And then, in particular, in locations where you want to attract fall and winter crowd, it’s going to be hot tub and fireplace. So, I think that’s just those are the things that are like just such clear differentiators.

They’re not as bespoke and exciting as like golf simulator or like people always talk about a cold plunge. Yeah, a cold plunge sauna. Oh, there’s electric car charger, like also important, also gives you impressions.

But that’s not used as nearly often as people that say, Yeah, I want a house with beach house, the pool. Are are those additional the saunas, the hot tubs, the cold plunges?

Are they do they actually move the needle or are they just really good at it? Okay, 100%. Yeah, I mean, I think there’s just very clearly, they’re very, very easily and very frequently used filters.

And as such, you’re going to have more impressions if you have them.

Well, I think it’s interesting about the Wi-Fi, and that’s something that we kind of take for granted.

7:57

Boosting Rankings Fast

But especially in this kind of like post-COVID world, when people might want to come up here for two weeks. But if you have to take calls, you want to be sure that not only is there Wi-Fi, but like, is this Wi-Fi reliable?

100%.

You know, and once you get out into the woods, that can be questionable. So being able to like guarantee to your guests that they’re going to be able to take their call and then go out on the lake, that’s a big deal.

Yeah. And it’s actually a little bit different by country too. Like in Spain, for some of our properties, like it actually isn’t a given.

8:25

Promotions That Convert

Yeah.

That they’re going to have Wi-Fi.

I mean, the AC in Spain, for sure, that is not a given.

You can make stone walls, you don’t even get it.

Yeah. Room to room. So we talked about how this home has a lot of five star ratings, the host is super interactive.

Aside from amenities, what are some of the best ways to actually boost your rankings or be higher in the algorithm? Yeah. I mean, it always starts with deliver of quality of experience, which is where really the cancellations and the reviews come in.

But beyond that, I would say it’s about demonstration of value. And the easiest way to do that is via promotions.

So for promotions, I guess it was last June, we launched early bird promotions, last minute promotions, mobile promotions, and member-only deals.

And what we’ve seen is that properties that are using these new promotions are converting 40 percent better than those that don’t. So what’s the average promotion?

I don’t know that I’m at liberty to speak to what’s average, but I can tell you that the typical one that we use as entry level is 10 percent. And worth noting, the four I mentioned don’t stack on top of each other.

So we’ll just take the largest of the ones that are eligible. However, if you get a week long stay and you have a week long discount of 10 percent, like the stay, and then you have one of those promotions, they would stack.

So it’s critical that you understand what seasons you’re using them, what market you’re in, because you certainly could understand if you were in the Northeast, where you kind of have like a 12 week season, and every booking you have has a 20 percent

discount, that might be a problem. So we’re here to have a conversation with you about how you’re going to demonstrate value versus other properties while also driving the cash flow you want out of the business.

Yeah. I think it’s great for managers that are like, okay, how do I get that shoulder season or even off season?

10:25

Is The Gold Rush Over

It’s like, okay, let’s be creative. If you’re going to get no revenue, maybe you have a steeper last-minute booking or early bird for these types of periods of the year to kind of encourage that booking, which we were talking about this earlier.

The booking window is just ever shrinking, so kind of anything you can do to get people in there.

It’s either ahead in the bed or not.

Yeah.

So I think that in particular, the last-minute one, it’s a promotion and we’re giving you strike-through pricing for it, but it’s really just smart yield management.

Yeah.

You’re probably doing it already. Yeah. You’re snagging credit.

You may as well just get credit for it. Exactly. Since COVID, we’ve had a really big supply boom in the short-term real industry.

Bubble.

Some might say.

Okay. I was going to say, it’s really good for the platforms, theoretically. Works for us.

Is the gold rush over? If by gold rush, you’re referring to, you’re going to do this, it’s going to be easy, and I’m going to get rich. You buy any home and any vacation, it’s a market.

Hell yeah, it’s over.

Say it louder for the people who are back.

Listen, we all that manage properties, whether you’re a professional property manager or an individual owner like myself, I remember during that time, I’d have an open Monday and Tuesday night, and it would get booked at rack rates.

I think that created the perception that this is easy. Because now, there’s so much supply on the market, I think it’s actually we’re pivoting back more towards the quality narrative.

If you can demonstrate quality and you can demonstrate value, you’re the ones that are going to win. If you’re inconsistent, I think you’re hosed.

I think that that’s the inventory that if in fact we believe there’s a bubble, that’s the part that will eventually go to long-term rental or something else because it’s not going to work.

I feel like any PMs that are dealing with frustrated owners should send them this clip because I think there is this unrealistic expectation when people are like, well, in 2021 and 2022, we were making blah, blah, blah, blah, blah.

It’s like, well, there is a different reality now. Also, to your point about quality and consistency, if owners aren’t willing to now reinvest, maybe five years after they brought the property, it’s time to refresh things.

12:44

Quality Over Quantity Era

That is important. It is important to have new photos. It is important to replace some things throughout the home to make sure you keep that quality up because the people that are providing quality are going to crush you.

Yeah, it’s amazing how frequently I hear about PMs they’re still having these conversations with their owners.

It’s still happening. I mean, we’re five years later. Owners bought at peak prices, at peak interest rates, and the math changed, folks.

Math changed big time on both sides. They can’t sell the house for what they bought it for, and they’re not making what they might have made in year one or that they were told they were going to make.

But yeah, I think, and I’ve heard Vrbo talk about this a little bit, but we certainly seem to be in the quality over quantity phase. We’ve pushed the quality or quantity as far as we can.

Demand is still growing, but it’s not growing at the same pace that supplies growing. Our business is doing absolutely amazing. Does that mean that the average owner is making more than they ever have?

Not necessarily. Yeah. Almost certainly not.

Yeah. And what I would all say is like, I believe in the state that we are in the industry, that the quantity of properties that you have is totally a vanity metric.

Whether you’re an OTA or you are a property manager, it’s actually more about having enough selection so that there’s something really good on the shelf when the traveler comes.

And then when the traveler actually stays at the property, it’s an amazing experience because that’s good for the property management brand or that’s good for Vrbo for us as an OTA.

Every time there’s a bad experience, that’s bad for a PM, it’s bad for OTA, it’s bad for the category, which is why anybody that’s shouting from the mountaintops about X number of units they have, I’m kind of like, I don’t care.

Plus all the VCs that cared about that changed their tune.

Yeah, we’re not around anymore.

Well, and that’s, I think it’s important. Also, we were talking about promotions, and all these different things that you can do. It’s important that people understand the OTA game.

There is a way when you bring a property online that to get as many good reviews as you can, there is a pricing strategy and a promotion strategy.

It’s interesting that since I’ve changed companies, there is this reluctance among, I’ve discovered among homeowners to do any of that. They’re like, no, this is the rate we’re gonna start with.

You can’t discount until a certain percentage or whatever. And it’s like, no, there’s a reason why this happens. We wanna position you for the long term on Vrbo.

And these are kind of some of the things you gotta do to make sure you get the guests in there right away.

I would just ask that owner, like, do you stay at Vacation Rentals? They’d be like, uh-huh. Well, would you book one that has no reviews?

Well, I don’t know. Probably only if it was discounted, bingo.

Yeah, right? Exactly.

For the right price.

That’s the thing. And even, I mean, being in the industry for a long time, when I go to book a home, I am immediately the number of reviews, even if they have maybe a slightly lower score.

If someone has a four, seven, nine, but they have 200 reviews, I’m like, okay, let’s take a look.

They’ve been in the game for a while.

They’ve been in the game for a while. And also, let’s see if they made some improvements on those reviews, how have they responded? And I think that that’s, if you have two reviews, and you’re like, eh, you know, it really…

Still uncertainty.

So it is, I think you have to, we are in this, so we know how to be sophisticated when we’re looking as a traveler. But I think it’s also important to educate homeowners. This is how you are being perceived on the other side.

Yeah, it’s no different than hotels.

Hotels that have been, this hotel that we’re staying at up here has been around for 125 years. So it’s going to have reviews for as long as the Internet has been around. But it’s really about what’s happened most recently.

And I do think that’s a delineation that a lot of us in the travel space apply to hotels, but don’t necessarily apply to short terminals. And we just look at the broad filters, not actually what’s been going on lately.

And it could be a new owner, it could be a new furniture, it could be a new management company, that listing could have passed hands. But it is a…

I mean, all the factors are important, but quality right now with reviews, there’s more supply than ever to choose from.

16:58

Standards And Trust Issues

So the traveler has all the options. Yeah. I mean, one thing I would say that’s different than the hotel category, typically though, is the hotel categories have major brands that have a standard that you recognize.

And I would say that there are certain vacation rental companies that are trying to institute things like that. And Vrbo certainly, we’re leaning into certain standards in terms of accept your bookings and don’t cancel them.

But the vacation rental category for years has not had a ton of standards. And I think that that’s why the online content and reviews is even more important. And the opportunity for everybody to lean into a standard for our industry.

Yeah, I was about to say, is a time for third-party industry standards. I know you guys are working on some, which is great. And we know that’s going to play into algorithms and whatnot.

But it sounds like you’re saying there’s a call for the industry to now figure out as a collective how to proceed.

I think one way or another, I mean, listen, all of the studies that we did indicate that the primary like bad vibes that people have around vacation rentals is, like it’s just uncertainty. Like, I don’t know if it’s going to…

First of all, I don’t know if the property is in real or exists. I have no idea if the host is going to cancel on me. I have no idea if when I get there, it’s actually going to look like the pictures.

And anything that we can do, whether that’s through online data or vetting or continued, frankly, policing our industry, that’s the right thing to do, especially in the context of there’s so much fricking supply out there.

Yeah, like we can we can carve out some supply and we’re going to be fine.

Well, and I think that’s what our industry, it’s particularly challenging because, you know, we’re in someone’s home right now.

Whereas hotels, you’re saying like there’s like a certain way this hotel is built and then furnished and there’s SOPs and they’re same everywhere. But we’re dealing with thousands and thousands of homes that were built uniquely in some cases.

19:00

Cleaning and Reviewing Data

So I think having, we have this extra challenge of figuring out, okay, what are the standards that we want everything to have that is possible in all of these different homes?

Yeah, it’s hard. There’s a reason nobody’s quite nailed yet. I mean, I think we’re taking a stab at it from the online experience and data, but like you as a PM, I’d be curious to see like, well, how would you do this?

Like I know that people work with like in Haven, for example, because they verify a certain quality of some of the things that are going into the home.

That’s probably an interesting opportunity for people to think about how things are, how the quality of the items in the house. But isn’t there also then, there’s a standard operating procedure and a standard of quality that you need for cleaning.

Cause we know that’s the most important thing.

Oh my God. And the cleaning, I mean, and when you start getting into like, I mean, a company that has 40 or 50 housekeeping vendors, it’s like, okay, how do we track all of this?

And I think honestly, it also comes back to reviews, tying like something like housekeeping to the stay and having like a leaderboard of, okay, you have this housekeeper is consistently getting fives.

And then the housekeepers or the house cleaning companies that are consistently falling behind, you put them on a pip just like you would an employee. And if you, you know, in 30 days, you can’t do it, then you get rid of them.

But it’s using data-driven decisions to kind of create those standards and reviews really like, I, as a PM, sometimes I’m like, oh my God, we’re like a slave to these reviews.

20:26

Reviews Signal Quality

And like, you know, I get a little jaded about it. But then I’m like, this is actually real-time feedback that we’re getting, you know?

It is. I would, I would say as a traveler, though, I feel inclined to give a five-star, even if it’s not. And so travelers are…

Some travelers don’t feel that way.

Maybe not.

But, but I don’t think it’s a good feedback system. I don’t think it is the purest. There’s got to be a better way for our category.

I’m still not 100% sure what it is, but I’ve certainly been given it some thought. I mean, I think, yes, it’s a problem that sort of five is… Five is the bare minimum, really.

Yeah, it’s five or everything else is awful. Yeah. It does create…

It does also mean, in the law of large numbers, reviews is a decent indicator of quality, we found. I mean, there’s a story I’ll tell you. There was a property manager of mine that I’m also friends with.

And he, a few years ago, when the Premier badge was a little bit different, we lost Premier, and we started digging into why. And we started noticing all these reviews that weren’t so great in a very specific area.

And he’s like, huh, well, that’s exactly where I changed the cleaning company.

21:36

Star Ratings Confusion

Once you do your homework, I think there’s still value in there that makes it an okay system. But I agree with you, there’s probably a better way.

Well, and it gives people, you can incentivize different people in your team, right? And empower them to be like, okay, this is why, and you can tie bonus performances to it and things like that.

And because this is the other part, this industry is incredibly laborious and ops is a beat down a lot of the time. So it’s making sure that your staff feels empowered to deliver that experience all the time.

And so I think that can also be a good gauge. But I think sometimes when guests think that the star rating is like a hotel star and the ones that just drive me insane, I remember seeing like three stars. Everything was fantastic.

And it’s like, why is it three stars?

22:26

B2B Growth Expansion

And I remember traveling with my mom at one point and she had booked the stay and she was like, well, this was great. So I think I’ll leave it a four star. And I was like, what are you doing?

No, like it was five stars regardless. And as a PM, I will privately message if something has happened. But I was like, I know what the pain that it takes to overcome these reviews.

Pain to overcome a four.

Yeah, a four.

It might as well be a one. You’re just like, oh, my God, at one point, we calculated how many five star reviews we’d have to get to combat one four star review.

Sounds like something Andreas would do.

Oh, for sure. Absolutely.

A big part of what Expedia has been putting out over the past year has been the B2B side of things. How much of that has trickled into the Vrbo brand? And what should we expect of the next year from that?

Yeah, so public company stuff probably can’t give you any exact numbers, but I certainly can tell you that our B2B growth has doubled year over year for vacation rentals.

And we look forward to it scaling even more this year when we start putting the inventory into more demand channels that will really amplify it.

And we think that we’ve solved a lot of the technology issues that are going to enable us to do that this year.

I would say that the revolution has already started in terms of putting vacation rentals on Expedia, where we’re showing absolutely explosive growth. So I would say that we’ve talked on this show before about the years where we were re-platforming.

Based upon that re-platforming, that’s what enabled us to launch promotions last year. That’s what enabled us to have vacation rentals really start to ramp on Expedia last year. And I think that this year we’re going to see similar ramp on B2B.

And that’s the name of the game, right? The name of the game is taking advantage of the full depth of Expedia Group and the capabilities that it has.

Yeah, it’s interesting. Now that I’m in more of the traditional VR world, and I was like, so when are we going on Expedia? And I feel like they’re still in some segments of the industry.

That’s like, that is the hotel. Like, we’re not going over there. And I’m like, no.

You’re there.

Why is there some book? You’re there.

I know. And I was like, there needs to be, to your point, taking advantage of all of these things that we have at our fingertips. Like, let’s all make some more money.

And on the flip side, the multi-unit players, like you used to work for, that is now showing up as a proper clustered room type rate plan on Vrbo.

So the distribution is working both ways.

25:09

AI In Travel Tech

And I think that we’re continuing to optimize it and personalize it. I mean, for example, you got the World Cup coming up. And in Kansas City, I don’t have a lot of good vacation rentals, but there’s some pretty good multi-unit condominium inventory.

So we’re trying to think about how do we surface that better, especially stuff if I know that it’s close to the stadium. And the Europeans are probably more familiar with the Expedia brands than the Vrbo brand. Oh, for sure.

And so being able to cross-pollinate the platforms by regions as well, should be super helpful. It’s what will enable us to be a much more global company. So enabling things, AI has been enabling.

How long did we make it before AI?

Most of the way, most of the way.

But AI is everywhere, you can’t ignore it. I use it every day. I’m the least technical person that I know of.

How does Expedia, Vrbo view it, both from a supply side of things, but also a demand or a guest function? I think we’re incorporating it into everywhere we can within our technology. I think that we have summarized reviews.

That’s probably the one that as a traveler, I find the most intuitive. If you have 200 reviews, you don’t feel like going through 200 reviews.

26:32

Keeping Human Hospitality

With AI, we do a very good job of summarizing those reviews. That’s one that I’m excited about. We also then, in the service experience, are using it to answer certain questions.

Over 1.3 million questions have been answered by our AI-driven chatbots successfully. We’re excited about some of the scale that it will bring us at the same time. Hospitality, in particular, vacation rental hospitality requires a human touch.

I want to make sure that as a business, we don’t over-rotate to AI because that’s an exciting thing to say on earnings calls.

Yeah, right. Yeah.

How do you ensure the delivery of hospitality in the age of AI? And we’ve all seen it checking in at hotels or short terminals. Everything’s automated, which is great because it rarely slips through the cracks.

But then particularly for smaller properties, smaller hosts, the personal touch sometimes gets washed out. Yeah, I think some of it really matters by, you know, you have to relink the warmth and the warmth that comes with vacation rentals into it.

Like, the examples I always think about are, like, the perfect welcome gift that is, you know, something that is related to the local location well. Like, I don’t know, like, understanding what is actually going to be emotive.

I don’t think AI understands that. So it’s that plus, you know, personal communication that’s not always just bot-driven, to make sure that, you know, hey, this is the place I take care of, Mr. and Mrs.

Traveler. I just want to confirm that everything’s great. Like, that check-in, I think, still really matters.

Casual, non-robotic.

28:16

OneKey On Vrbo

Yeah. Right? Yeah.

I don’t want to feel like an out of office.

And I think it’ll be exciting, like, for AI once we start getting into, like, you know, how can that help on the back end? How do we, you know, setting up new listings when you can do, like, a batch of 100?

Like, I think that once we start perfecting that side of it, that’s where, like, the real exciting stuff is going to come in. And that doesn’t really touch on or infringe upon the hospitality.

It actually will free up teams to have more time to write the personalized note or go greet the guest or whatever it may be.

Automation of tasks? Hell yeah.

Yeah.

That’s AI crazy.

Absolutely.

There’s plenty of those in this industry.

Yes. Yes.

One Key was big news a year, year and a half ago. How is that percolated into Vrbo? It seems like from a travel perspective, maybe it’s been pushed down a little bit compared to some of the other Expedia brands.

Is that the case or? I think we’ve tailored the One Key program based on the various brands.

I think the significant thing that’s really been helpful for Vrbo is we’ve found, I think it’s something like two-thirds of the people that booked on Vrbo and used One Key Cash were somebody that had never been on Vrbo before.

Which means that that is somebody that’s coming to the vacation rental category, which is great. That being said, for people that are actually booking on Vrbo, traditionally, it’s a brand where people have booked one or two trips a year.

29:48

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GMH Bonus: Vrbo’s Tim Rosolio on AI, Supply Boom, and the End of Easy Money in STRs