Today, as Expedia announced it is buying HomeAway for an estimated $3.9 billion, HomeAway also shook the vacation rental industry by announcing they are adding a traveler free to guests booking vacation rentals on HomeAway’s suite of online marketplaces.
Management Comments:
Brian Sharples, CEO, HomeAway: “Today we’re announcing business model changes, including the addition of a traveler service fee in mid-2016, which will dramatically change our ability to compete and thrive in the coming years,” says Brian Sharples, chief executive officer of HomeAway. “Better monetization will allow us to accelerate revenue growth, but most importantly will provide more resources for an even better product and service experience for our owners, property managers and travelers.” Mr. Sharples noted traveler service fee, which will be based on a sliding scale, will begin rolling out in Q2 of 2016 and is expected to add an average of roughly 6% to most transactions that run through its online shopping cart. In conjunction with the new traveler service fee, the Company plans to lower commission rates for most of their pay-per-booking customers and provide financial incentives to subscribers based on their annual booking volume through HomeAway’s platform.
Expedia Acquisition
Sharples continued, “Separately, we’re thrilled to announce our agreement to join the Expedia family of leading travel brands and couldn’t be more excited about what this move means for our very bright future. We’re eager to benefit from Expedia’s distribution, technology and expertise, which will allow us to provide an even better product and service experience for our owners, property managers and travelers. In this way, I believe our combination with Expedia will turbocharge our growth and industry leadership for many years to come.”
Dara Khosrowshahi, CEO, Expedia -“We have long had our eyes on the fast growing ~$100 billion alternative accommodations space and have been building on our partnership with HomeAway, a global leader in vacation rentals, for two years. Bringing HomeAway into the Expedia, Inc. family and adding its leading brands to our portfolio of the most trusted brands in travel is a logical next step. We have tremendous respect for the HomeAway team and the business they have built. With our expertise in powering global transactional platforms and our industry-leading technology capabilities, we look forward to partnering with them to accelerate their shift from a classified marketplace to an online, transactional model to create even better experiences for HomeAway’s global traveler audience and the owners and managers of its 1.2 million properties around the world.”
How does this fee help Owners, Clients and Property Managers The only one this fee is helping is HomeAway and VRBO corporate pockets. The changes to the VRBO website and my rental ad over the last year is concerning and now we also are having our rental business put in jeopardy because of our possible clients getting charged another 9 percent of their rental fees. I was told that the 9 percent is going to improve the website and to add pay for more ads for the website. Why do we need more ads on our rental sites. My rental ad already has multiple competitive rental location ads on the sides and bottom of my rental – isn’t VRBO and HomeAway making money on these ads. I also appreciate the fact that basically all available contact with Customer Support has been virtually shut off to owners…. Not only do we now have a hard time contacting customer support to ask about the changes and their impact to our rental availability, but we get to experience a new breed of customer support people brought on who are rude, condescending, and Nazi like. I have been told that they can do whatever they want, whenever they want, and for how much they want and I don’t have any control over it. I have been told that they don’t want to hear my negative comments anymore and were hanging up. I have been lied to stating that the service fee was always included in the rental fees and when calling the sale person on it, was abruptly told I couldn’t talk to them as I was an Owner. What the hell is going on.
This is just crazy. I also have three short term rentals with three more coming live very soon. This, Service Fee is killing my reservations. I agree with everything you have said This needs to stop. If it gets too expensive for the consumer to rent short term rentals, they are going to go back to staying in hotels. A family going on vacation cannot afford to have more JUNK fees added.