Inside Vrbo’s Strategy: Quality Over Quantity, AI Innovation, and the Future of Vacation Rentals

Jamie Lane, Chief Economist at AirDNA, sits down with Tim Rosolio, VP of Vacation Rental Partnerships at Vrbo (Expedia Group), for an in-depth conversation about Vrbo's strategic direction in 2025. Lane, who hosts the data-focused podcast series, brings analytical expertise to the discussion, while Rosolio offers insider perspectives from leading Vrbo's global supply and innovation efforts.

Vrbo's Strategic Evolution in 2025

The Shift from Quantity to Quality

The vacation rental industry has undergone a fundamental transformation in its approach to growth, moving decisively from maximizing property counts to prioritizing guest satisfaction and host success. This shift represents a critical evolution in Vrbo's vacation rental strategy for 2025, driven by market dynamics that emerged during and after the COVID-19 pandemic.

"The count of properties is a vanity metric. What matters is having the right selection of properties that deliver a consistent stay and make people want to come back to your brand," Rosolio emphasizes, articulating Vrbo's new philosophy. This perspective marks a significant departure from the platform's earlier subscription-based model, where more listings directly translated to more revenue.

The pandemic created what Rosolio describes as a "demand bubble" followed by a "supply bubble." During 2020-2021, insatiable demand led to properties booking at full rates even for midweek stays. This unprecedented success attracted many new hosts who thought vacation rental management would be easy money. Some attempted self-management, while others partnered with inexperienced property managers. The result? A flood of new supply that, according to Rosolio, has somewhat diluted the consistency of quality across the market.

"Now more than ever, having a strategy around what you're doing is important," Rosolio states, underscoring the need for hosts to be intentional about their approach in 2025. This quality-focused strategy aligns with evolving traveler behavior. The industry, traditionally built on annual beach and ski trips, now sees travelers taking more frequent, diverse trips—weekend wine country getaways, urban stays for sporting events, and short breaks throughout the year. Delivering consistency across these varied experiences has become paramount for building brand loyalty and driving repeat bookings.

Vrbo's Target Traveler Profile in 2025

Understanding who books on Vrbo remains crucial for hosts developing their vacation rental strategy in 2025. The platform's core audience continues to be families and groups, but with distinct characteristics that create economic advantages for property owners.

"Our travelers book earlier, stay longer, spend more, and, based on demographics, respect your home more," Rosolio explains, outlining the key benefits for hosts. These traveler behaviors translate directly to improved revenue and reduced property wear, making Vrbo particularly attractive for hosts seeking quality guests.

However, Vrbo's 2025 strategy extends beyond its traditional audience. "It's about Vrbo plus starting whole other segments," Rosolio notes, describing plans to expand reach through Expedia's broader ecosystem and B2B partnerships. This approach maintains Vrbo's family-friendly foundation while opening doors to new, responsible traveler segments through strategic distribution channels.

Technology and Innovation Driving Vrbo in 2025

Platform Integration and Demand Expansion

The decade-long journey of integrating Vrbo and HomeAway into the Expedia Group ecosystem reaches a pivotal moment in 2025. What began as an exciting acquisition in December 2015 with promises of expanded distribution has finally overcome the technical challenges that delayed its full potential.

"We needed to totally rebuild the business," Rosolio reflects on the integration process. The initial vision of "everything selling everywhere" faced significant hurdles as three independent technology stacks—Vrbo/HomeAway, Expedia, and Hotels.com—needed complete reconstruction. The companies were even bidding against each other on Google keywords, illustrating the depth of operational silos that needed dismantling.

Now, with the technical replatforming complete, Vrbo is experiencing unprecedented innovation velocity. "The way we're rolling out technology to expand demand and help partners drive the travelers they want is at a rate we've never seen before," Rosolio shares enthusiastically. This acceleration comes from leveraging solutions originally built for Expedia's hotel business, creating quick wins for vacation rental hosts.

The B2B network expansion represents a game-changing element of Vrbo's vacation rental technology strategy. Partnerships with major brands like Delta Airlines and American Express bring vacation rentals to entirely new audiences. In Italy, Expedia's collection of B2B websites already generates more hotel bookings than Expedia.com or Hotels.com individually—a model now being applied to vacation rentals. This international expansion through trusted third-party brands promises to deliver high-value travelers to properties across Vrbo's network.

AI and Personalization in the Booking Journey

Artificial intelligence is transforming how travelers discover and book vacation rentals in 2025. Vrbo's AI initiatives span three key phases, each designed to reduce friction and improve conversion rates throughout the booking journey.

The most impactful innovation for travelers may be AI-powered review summaries. With properties accumulating hundreds of reviews, these summaries extract key themes and insights, making decision-making easier. "Review summaries…reduce the cognitive load for travelers," Rosolio explains, highlighting how this technology addresses a real pain point in the booking process.

Vrbo's partnership with Perplexity and integration with other AI platforms represents a forward-thinking approach to traffic acquisition. As travelers increasingly turn to AI assistants for trip planning, Vrbo positions itself to capture this highly qualified traffic. "If we can get them to a landing page with matching inventory, that will convert well and enable us to invest more in traffic profitably," Rosolio notes, describing the virtuous cycle of improved conversion driving increased marketing investment.

The shift from traditional search to AI-assisted discovery is already underway. Travelers typing detailed queries into AI platforms—seeking specific amenities, locations, and property features—demonstrate high booking intent. Vrbo's strategy ensures these AI-generated leads land on perfectly matched inventory, maximizing conversion potential.

Personalization and Loyalty

The One Key loyalty program launched in 2024 sets the foundation for sophisticated personalization in 2025. This cross-brand rewards system does more than offer points and perks—it creates a data-rich environment for understanding traveler preferences across the entire Expedia ecosystem.

"One Key…gets people to log in, so we can understand their preferences across Vrbo, Expedia, and Hotels.com," Rosolio explains. This comprehensive view of traveler behavior enables personalization that extends beyond simple demographic targeting to understand trip context, booking patterns, and property preferences.

The convergence of AI capabilities and loyalty data promises multiplicative effects. "As our personalization efforts combine with our AI initiatives, it could have a multiplying effect on our ability to provide personalized options," Rosolio predicts. While some travelers will appreciate AI-curated selections of one or two perfect properties, others still enjoy browsing. The key is ensuring they're not shown irrelevant options, making the search process both enjoyable and efficient.

Host Economics and Platform Participation in 2025

Payment Solutions and B2B Network Access

Access to Vrbo's expanding B2B network requires hosts to adapt their payment processing approach. The platform's new merchant of record solution, currently in pilot, represents a strategic shift in how transactions are handled—and opens doors to significant new demand sources.

"Vrbo Payments will be an optional solution with benefits, including access to the B2B network," Rosolio clarifies. For hosts currently using third-party payment processors like Stripe, the transition promises similar or slightly lower fees while unlocking distribution through Delta, American Express, and other major partners.

The economics remain straightforward: "We charge for payments an amount likely similar to or a little less than what you pay Stripe," Rosolio explains. Commission rates stay the same, with only the payment processing provider changing. This opt-in approach recognizes that some hosts prefer maintaining merchant of record status, while others welcome Vrbo handling the complexity of payment processing.

For hosts using property management software or channel managers, understanding these requirements becomes crucial for maximizing distribution in 2025. Properties not participating in Vrbo Payments will miss out on B2B network exposure—potentially significant given the high-value travelers these channels attract.

Commission Models and Fee Transparency

The vacation rental industry's ongoing debate about fee structures continues to evolve in 2025. While some competitors have announced shifts to host-only fee models, Vrbo takes a measured approach to any potential changes.

"Whether it's host-only commission or a split with a traveler service fee, the price the traveler pays ends up about the same," Rosolio observes. The platform's focus remains on understanding traveler psychology rather than following industry trends blindly. "The big question is whether travelers care about how fees are broken down," he adds, indicating that A/B testing will guide future decisions rather than assumptions.

This data-driven approach to fee transparency reflects Vrbo's broader commitment to optimization through testing. The platform recognizes that while transparency has value, conversion rates ultimately determine success. Hosts should prepare for potential fee structure evolution while understanding that any changes will be based on what drives the best outcomes for both travelers and property owners.

2025 Market Trends and Performance

Summer 2025 Booking Patterns

The summer 2025 travel season revealed important shifts in booking behavior that hosts must understand to optimize their vacation rental strategy. Compressed booking windows, which caused concern in early 2025, ultimately gave way to strong last-minute demand.

"We're very pleased with our end-to-end summer performance, much of which came late," Rosolio reports. This pattern—anxiety in March and April followed by robust last-minute bookings—demonstrates travelers' continued appetite for vacation rentals despite economic uncertainty. The key difference from previous years lies in timing rather than total demand.

"Promotions really helped us when booking windows were compressed," Rosolio adds, highlighting a crucial tactical element for hosts. The ability to deploy targeted promotions for last-minute inventory proved essential for maintaining occupancy rates. This trend suggests hosts need greater flexibility in their pricing and promotion strategies, moving away from rigid advance booking expectations.

The lesson for hosts is clear: patience and adaptability pay off. While early-season booking pace may cause concern, maintaining rate discipline while strategically using promotions can capture late-booking travelers who still seek quality vacation rental experiences. Understanding these market dynamics becomes essential for revenue optimization throughout 2025.

Scaling in the Vacation Rental Industry

The question of scale in vacation rentals takes on new meaning in 2025, with lessons from past failures informing current strategies. The industry's history with large-scale consolidation—from ResortQuest to Vacasa—provides crucial context for understanding sustainable growth models.

"Scale will work with the right local eyes, ears, and ground game," Rosolio asserts, identifying the key element missing from previous scaling attempts. The challenge lies in maintaining local relevance and personal relationships while achieving operational efficiencies. Successful scaled operators like AvantStay, Rented, and VTrips are pioneering models that retain local property management expertise within larger organizational structures.

Rosolio shares a telling example: "When Monarch bought Miller Hawkins…they incentivized him to stick around so owners felt they were still in good hands." This approach recognizes that vacation homes represent owners' most expensive assets, requiring trust that can't be replaced by corporate efficiency alone.

Vrbo's role in supporting scaled operations focuses on strategic partnership rather than individual host relationships. "Our role is to partner with these large companies to drive more volume at scale, using all the data, information, and capabilities we have," Rosolio explains. This approach allows Vrbo to work with one management team to optimize strategy across thousands of properties, creating efficiencies that benefit the entire ecosystem.

The implications for individual hosts and property managers are significant. As the industry matures, success increasingly depends on either maintaining strong local differentiation or aligning with scaled operators who preserve local expertise. The "vanity metric" of property count gives way to meaningful scale—operational efficiency combined with market knowledge and owner trust.

Looking ahead to late 2025 and beyond, Rosolio hints at continued innovation focused on the traveler experience. While recent platform updates emphasized partner tools, upcoming releases promise to enhance Vrbo's appeal as a "consistent and quality platform" for travelers. This dual focus on supply-side efficiency and demand-side experience positions Vrbo to capture growing share in an evolving vacation rental landscape.

For hosts and property managers navigating 2025, the message is clear: success requires embracing quality over quantity, leveraging new technologies thoughtfully, and understanding that sustainable growth comes from delivering consistent guest experiences rather than simply adding inventory. Whether operating a single property or managing thousands, aligning with these strategic priorities will determine success in the dynamic vacation rental market of 2025 and beyond.