DiscoveringStartups -Tech Startup Reviews

VacationView, Inc. has created an Internet marketplace for timeshare rentals by owners – Resort Rentals By Owner (RRBO.com) where consumers can rent timeshare properties from their owners using state-of-the-art Internet tools and proprietary methodologies. RRBO enables consumers to easily locate available rental properties online, immediately learn about them and then provide a simple way to book a rental at discounts that average 30-50% versus booking through traditional online travel services. The founders have significant experience in creating Internet based consumer products and discovered an industry that is rife with problems in serving its captive market of timeshare property owners and an opportunity to provide dramatic discounts to consumers looking to rent a vacation property. RRBO is a “Stub Hub-like” marketplace for timeshare property owners to quickly list their properties for rent and for consumers to find and rent these units online.

1) We have a significant price advantage on vacation rentals because we offer units directly from timeshare property owners who are motivated to rent units they’re not using to cover their annual maintenance fees. Vacation resort properties and hotels use trading partners and wholesalers such as Orbitz and Travelocity, who plug into the hotel reservation systems and market available rooms and there are price thresholds that protect the wholesalers – in effect setting minimum pricing in the market. RRBO prices are 30-50% below these minimum thresholds on a consistent basis.

2) We’re different from vacation sites like VRBO in two key ways:
- RRBO focuses on resorts – managed by companies like Marriott, Hilton and Disney. The quality and amenities at these resorts is predictable and well known. VRBO focuses on individual vacation homes.
- RRBO manages the transaction and payment so that the owners and renters don’t have to connect with one another and deal with this hassle. VRBO has the renter contact the owner and work out the rental agreement and payment. An analogy to the tickets and events marketplace is: RRBO is like StubHub, and VRBO is like Craigslist.

Vacation travelers are looking for great deals and RRBO has a structural pricing advantage versus booking directly through the resorts or the travel aggregators like Orbitz, Travelocity and Expedia. RRBO rentals through the owners are consistently 30-50% less than these other sites. Getting BIG will be a function of raising enough capital to invest in marketing to scale this business to meet market demand.

The model is a lot like StubHub but aimed at Vacation rentals and the 5 million timeshare property owners in North America who are motivated to rent properties when they aren’t being used every year

The company has a transaction based business model. For each rental on the site the owner will be charged a 15% fee of the rental price for marketing the rentals and managing the transaction, if and when a unit is rented. (There is no charge to list a unit for rent, which is a competitive advantage versus listing sites such as VRBO and Redweek.com.) Additionally renters will be charged a 5% service fee on each transaction, which is consistent with comparable online services such as StubHub. In time, add on services such as travel insurance, car rentals, etc. will be added to the offering generating additional revenue for the company.

With an average rental price of $1500, the company will initially make $300 (20%) per transaction and a gross margin in excess of 50%. The company projects that over five years it can capture 6% of the exchange and rental market (5,000 rentals per month) generating over $27 Million in revenue per year.

No thoughts at the moment. Very interesting!

Please visit their website to learn more: http://www.rrbo.com