Originally posted by @Ryan Rabideau:
David,
The economics won't change, some of the cost will be borne by the consumers while some will likely result in slightly reduced rates--the deadweight loss will be marginal (lost demand). Adding marginal fees won't fundamentally destroy demand which is increasing as part of a larger trend. While this move is Expedia pushing HA to be more like Airbnb they are only one player and anytime a giant stumbles other newer options become available. This only makes having good channel distribution ever more important. I would recommend taking this time to evaluate your rates against the competition to make sure you are competitively priced and keep an eye on the comps if they are reducing rates, you may also start to see your channel attribution shift.
VRs can offer good yields in less than fantastic LTR markets as there are less bidders and institutional money driving up prices. VR investing does not have a lot of big money behind it which is why it still offers some good yields. I always recommend checking the VR comps (check calendars, rate sophistication, review counts and listing population) and checking the LTR rentals around. Some markets its actually profitable to rent from the LTR and list as a VR. Long story short it depends on the market and the property, every property is unique.
Are you saying it's not high cost to obtain VR property? Not sure which market you're in but over here, properties are ridonkulous. However, the returns are still much much sweeter than LT.
In regards to economics, if booking engines (HA, VRBO) are increasing fees on customers, wouldn't that change the economics? I guess, perhaps, what you might be saying is that increases can only go so high before it becomes detrimental to the industry itself... which the big companies wouldn't want to do anyways. So whatever increases occur, are probably negligible and can be easily adapted to.
