The Key Reason Airbnb Might Be Superior to Vrbo

Airbnb's (ABNB 0.10%) inventory has unmatched uniqueness. In this clip from "Ask Us Anything" on Motley Fool Live, recorded on March 23, Motley Fool contributors Jamie Louko and Jon Quast discuss why Airbnb might come out superior to Vrbo (EXPE 0.33%) due to its supply of offerings on its platform along with its strong brand name.

Jamie Louko: Vrbo and Airbnb are pretty similar platforms. Vrbo is actually the first mover if I'm not mistaken. They started this whole thing and got to scale before Airbnb. But I do see Airbnb as a superior platform for a few reasons. First, Airbnb just has a wider offering. They have nearly four million hosts. More than that, I think it's around over six million active listings on their platform. The inventory for users like us is just much larger on Airbnb than on Vrbo. Those stays are so much more creative, I guess. They're more unique. For example, you can live in a potato on Airbnb. There is a stay in Idaho or Iowa, whatever the potato state is, where you can live in a potato. That is just something you can not find anywhere else. Because if I'm being frank, there is probably only one potato that you can live in and it is on Airbnb, and I bet you that if you look out for the next year, nearly every single day is booked for that stay. Just those really unmatched uniqueness for Airbnb is just something that Vrbo has not been able to replicate. Secondly, I think that Airbnb has a stronger brand name. This is from personal experience. I live in Maine, so it's a small sample size. But when when I talk to friends about where they are staying, Airbnb comes up a lot. I said this on Backstage Pass yesterday. If you're a Backstage Pass member, you can go check out the show at 4:00 pm. But when I look for a really strong brand names, I look at my friend group around me, which is ages 19, 20, 21 and then I look at a slightly older demographic and for that, I use my parents and my parents' friends. And my mom, when I said that I was going to North Carolina, she said, "You should go on Airbnb, " and that was the first thing that she said to me. When a brand resonates so well between younger consumers like me, and a normal age demographic like parents, I really think that's so much stronger. The fact that both groups really know Airbnb and Airbnb is the first thing that comes to mind really gives it an advantage over a competitor like Vrbo, which I'm pretty certain if I asked somebody like my mom what Vrbo was, she's not the most tech-savvy person in the world granted, but if I were to ask her, I would be surprised if she knew what Vrbo actually was.

Jon Quast: Jamie, it sounds like we're almost speaking in anecdotes here, but I think that there's concrete data that supports what you're saying. One of the things that I noticed and this is from last year and it's for a limited amount of time, but a study was done showing that Expedia's vacation rental by owner V-R-B-O, Vrbo was outspending Airbnb 10-1 in advertising and yet, Airbnb continued to be the dominant player in the space, being outspent 10-1 by it's closest competitor. I think that really does speak to the name recognition of Airbnb's brand. It's more than just a feeling. This actually can be supported with data like that, that it is the top-of-mind brand. As far as what is the difference between them? Why did you have a good experience at a Vrbo and a bad one at Airbnb? For one, these aren't the companies themselves that are bringing these properties to the market. They are just the marketplaces. The person behind the scenes running the vacation rental on Vrbo or Airbnb, it's ultimately their responsibility to give you a good experience, so in that, yes, you can have a good experience on one, a bad experience on the other, a bad experience on the first one and then a good experience on the second. It is going to vary from trip booked to trip booked. That said, I don't know if you guys have any thoughts here. It almost seems like Airbnb has a lot of maybe even not all that desirable of destination properties. They are just these little houses that are nestled into neighborhoods and random places and for some people, in some circumstances, maybe it does make sense to book that. For example, I spent a couple of weeks in St. Petersburg just now. We stayed in a property that you wouldn't want to vacation to, but it was perfect to meet our needs for what my wife and I were doing. It was conveniently located and it had everything that we need to meet our needs for the right price, but it wouldn't be a vacation destination. Airbnb does have vacation destinations on it, but vacation rental by owner Vrbo does seem to be a little bit more of the, if you're booking this place, you're probably looking for a nice time. You're not so much looking for a place that is going to fit your needs for that specific circumstance. I don't know.