Vacation Rentals- cost going up for Hosts 20% ??

Question

In the vacation rental space? Did you read this article https://www.phocuswire.com/Expedia-HomeAway-marketing-model-strategy

Thoughts? Travelers looking elsewhere and for that not to happen. They want to push the cost over to the hosts

Leigh Ann Smith · Answer

I don't have any problem at all with them rolling the fee over to the host (as long as they don't also increase the fee!).  Right now, the traveler is going to pay the total of the host's rate + the VRBO fee.  But when they look at the property before booking, they only see the host's rate.  Then they go to book, and that big ol' fee gets tacked on there.  I suspect that's very frustrating for lots of travelers and sends them back to searching again.

If my property is going to be worth $100/night to a traveler, it doesn't matter whether I charge $75 and VRBO collects an additional $25 from him, or I charge the traveler $100 and then VRBO deducts the $25 fee from my payout.  Either way, I get $75.

Mike V. · Answer

I pay VRBO my annual subscriptions for all of my properties and then see all the guest fees in addition. It averages around $7500 in fees per property, per year. It’s agregious. I hope something changes because for the same reservation VRBO collects a hell of a lot more than anyone else and offers little for it.

Paige Kelsey · Answer

I have owned vacation rentals since 2010 and currently have 6 of them that I self manage. There was a time when listing cost1200 to  list on homeaway and vrbo. Those fees dropped dramatically once expedia was involved.  At one point I went with Evolve Vacation Rental to manage all the bookings - you do not pay the fees and it is 10% but they deal with the calls and the guest. It worked great until winter hit and they couldnt hold the bookings I was holding. I list on both airbnb and homeaway and maintain a 20-25 nights booked EVERY MONTH. I do get more with airbnb but really it depends on the lisitng. It is a different client for sure. The 4 bedroom home, does better on homeaway. The little cabins do better airbnb but the booking brought in make it worth it to advertise on both . Bottom line, if you are doing this  vacation rental well you should all be making  a LOT of money, if you did the work going into the deal and buy the right houses, you should be able to hold the same numbers I do.  A heck of a lot more than you would on a long term.  Hit me up if you want more info @kelseycommercial

But.....

Not every house can be a good vacation rental.Sorry but no, it is not exactly a dream vacation if the house you have looks just like your neighbor's house back home.  In sum, if fees are going to be your breaking point I wonder, did you buy correctly, are you committed to the buisness or are you committed to making a few extra bucks. This is a very different thing,

Dustin Glossop · Answer

Now Airbnb is actually testing this https://www.phocuswire.com/Airbnb-pilot-program

Passing the traveler fee to the host

Dustin Glossop · Answer

Leigh Ann: It absolutely matters as now you would have to charge $125 per night to net the $100 per night. You would be absorbing the travelers fees now. Then they could standardize your rate saying you cant charge $125 per night in your area. They only allow the $100 per night. Now you are only netting $75. This is definitely a huge issue and could easily happen soon.

Mark S. · Answer

@Dustin Glossop We would love to explore some options but in our area it seems like AirBnb and VRBO have a lock on things.  I'm not sure where else travelers are going to go in the future for bookings.  Things like our own website, craigslist, etc don't generate a drop of traffic compared to what we get through the big two.

I'm all ears.

Dustin Glossop · Answer

Thanks for sharing. Honestly, the problem is everyone relying on them and not making a change. They know you don't have another option, so they will continue to raise the cost. Owners/managers need to be proactive in making a change. Wouldn't you rather buy a new tire before one blows out to fix it? Having potential other problems with the aftermath? Maybe a bad analogy but you get the idea.

Vacation Rentals- cost going up for Hosts 20% ??

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