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Industry News for Vacation Rental Managers

HomeAway’s New Listing Agreement Leads to More Frustration Among Vacation Rental Managers

HomeAway’s New Listing Agreement Leads to More Frustration Among Vacation Rental Managers
mm
Amy Hinote
March 27, 2018

Expedia-owned HomeAway recently released an updated Listing Agreement for Property Managers which includes language for integrated property managers (PMs) that is causing anxiety in the vacation rental management community.

Last month, HomeAway announced that it will be further monetizing its platform by assessing fees for off-platform bookings. According to HomeAway chief commercial officer, Jeff Hurst in a previous interview with VRM Intel, the commission would be equal to 10 percent of the pre-tax booking total. The new agreement, however, gives HomeAway more flexibility stating, “. . . such rates may change upon reasonable notice to PM.”

But that is not the change that is upsetting PMs.

While HomeAway maintains that the PM’s decision to attribute bookings that originate on HomeAway’s sites is completely voluntary, the new listing agreement sent to PMs last week sheds light on the processes HomeAway intends to utilize in holding PMs accountable for paying for off-platform bookings. Included in the agreement are expanded off-platform booking definitions, a new set of reporting requirements, and a mandatory submission to internal business audits conducted by HomeAway.

Read the entire updated Listing Agreement for Property Managers

“How disappointing it is to read this, and (it) goes directly to a lack of integrity at the highest levels of decision making at HomeAway,” said Tim Cafferty, president at Sandbridge Blue Realty Services in Virginia and Outer Banks Blue Realty Services in North Carolina. “In spite of assurances verbally of their honorable intentions they continue to act in a disingenuous manner. It reminds me of the saying by Ralph Waldo Emerson, ‘Your actions speak so loudly, I can not hear what you are saying.’”

 

Notable Additions to the updated Listing Agreement

HomeAway’s Listing Agreement for Property Managers includes fresh language related to off-platform bookings and the tools HomeAway can use to police voluntary attribution of off-platform bookings.

First, here’s a glossary for PMs:

  • Integrated Property Manager: Any PM who is integrated through software providers.
  • HomeAway Lead: According to HomeAway, “A booking will be regarded as having originated from the HomeAway Network where PM receives through the HomeAway Network an inquiry, booking request, or other contact from or on behalf of a traveler about a Listing (each, a “HomeAway Lead”).”
  • Off-Platform Booking: “A booking will be regarded as having originated from the HomeAway Network where PM receives through the HomeAway Network an inquiry, booking request, or other contact from or on behalf of a traveler about a Listing (each, a “HomeAway Lead”), and then, as a result of and within 30 days of the HomeAway Lead, PM completes a booking for that Listing directly with the traveler or traveler’s representative, e.g., by telephone or e-mail (each, an ‘Off-Platform Booking’).”

1. Expanded Off-Platform Booking Definition

The new agreement expands the definition of off-platform bookings. The agreement states, “should PM receive a HomeAway Lead about a Listing that is or becomes unavailable for the traveler’s requested dates, and then within 30 days of that HomeAway Lead executes a booking with the traveler for another PM property that comprises the same or similar dates and destination—regardless of whether PM advertises the substitute property on the HomeAway Network—the Company will be entitled to a commission or Off-Platform Booking fee on the total amount charged for the booking of the substitute property.”

2. Reporting Requirement

Additionally, the updated agreement includes new reporting requirements. The agreement states, “It is the sole responsibility of PM to ensure proper reporting of all Off-Platform Bookings to HomeAway, and to transmit such reporting through the Integration, via the Booking Update Service (“BUS”). However, such reporting is subject to review and audit, and if the Company (HomeAway) finds that a certain booking of a Listing originated on the HomeAway Network but was not properly reported as attributable to a HomeAway Lead under the above analysis, then the Company will notify PM of such discrepancy, and will be entitled to assess a commission or Off-Platform Booking fee on the amount charged for such stay unless PM provides reasonable evidence to the contrary.

3. Consent to HomeAway Audits

According to reports from PMs, HomeAway’s auditing requirement is particularly disturbing. The agreement says, “HomeAway may conduct an audit from time to time as it reasonably deems necessary to assess PM’s performance and fulfillment of its obligations under this Agreement. PM will cooperate with the Company (HomeAway) with respect to any such audit, and will provide the Company with access to books and records of accounts, PM Software and related system information, and other information associated with the Listings and the Performance & Activity Reports, as HomeAway may reasonably request for the purpose of verifying proper reporting and payment of commissions and fees.”

A HomeAway spokesperson verified that this new listing agreement is current and clarified, “These terms and conditions are not specific to subscriptions and/or off-platform bookings. They are general for all types of listings, all scenarios. The terms are therefore inclusive of integrated property managers who list via subscription and have off-platform bookings but not exclusive to them.”

He added, “HomeAway has always had the right to audit. It is not new with this agreement.”

 

The Impact to the Vacation Rental Industry

“The new listing agreement released this week reveals a continuing presumption by HomeAway leaders that they ‘own’ travelers, and therefore they do not have the responsibility to compete for the loyalty of those consumers perpetually,” said Randy Hall, founder and CEO of Liquid Life Vacation Rentals in Orange Beach, Alabama. “The word entitled is used repeatedly in the agreement describing HomeAway’s perspective about charging a match-back fee to property managers. The new agreement also included significant language describing HomeAway’s ‘rights’ to ‘audit’ and ‘authorization to charge’ the property manager’s credit card on file.”

Hall added, “Travelers will eventually agree with property managers that they have a choice, and they don’t really want to be ‘owned’ by an ‘entitled’ HomeAway.”

PMs who fall under the HomeAway-defined category of “integrated property managers” argue that the new policies demonstrate inequitable treatment by the company, asserting they they are being treated unfairly in comparison to other rental home suppliers using the HomeAway network.

However, Expedia executives know that, in the United States, a significant number of integrated property managers, including the new set of fast-growing multi-destination management companies, are undeniably reliant on the bookings that come from HomeAway.

In contrast, legacy property managers who built their businesses before the emergence of HomeAway are far less reliant on HomeAway for bookings. Industry observers are watching these legacy PMs closely to see if HomeAway’s new requirements will result in a material loss of inventory for the company. If legacy PMs agree to the new terms giving HomeAway this increased control over their businesses, it will indicate a considerable shift in the vacation rental marketplace, potentially giving OTAs a blank check as they move forward with their vacation rental road maps.

Related ItemsauditsexpediaFeaturedhomeawayproperty managersreporting Listing Agreementvacation rental managers
View Comments (9)

9 Comments

  1. Queg says:
    March 30, 2018 at 10:35 pm

    Be patient….IBM, Pitney Bowes, Xerox pushed around businesses due to capital, patents…..they are either going, gone or insignificant today.

    Reply
  2. Keith says:
    March 30, 2018 at 9:35 am

    This move will make or break HomeAway as PM’s will decide whether to totally abandon ship or stay and support this aggressive strategy The 10% fee coupled with the audit rules though are going to be extremely hard for PM’s to stomach and many of the bigger portals (which PM’s rely on) will have a tough decision to make to move off the HA platform. If they do, it will seem like a mass exodus for HA and could thin down their huge inventory.

    There are two levels of intermediation as many of the big property portals use HA and this may be an opportunity for PM’s to look at the niche property portals like http://www.luxuryretreats.com and http://www.exclusiveprivatevillas.com and some of the regional portals like http://www.qualityvillas.com in Europe. Its going to be interesting to see how this pans out and see if there is some level of disintermediation in the industry.

    Reply
  3. Robin Craigen says:
    March 28, 2018 at 10:21 am

    If it wasn’t clear before, it certainly should be now. The writing is on the wall. Expedia ownership is going to ride this down to the basement where there is the ever increasing possibility that this will no longer represent the marketplace as inventory starts to disappear. Without homes they have nothing.

    Our subscription listings expire in a September. After that we will take that same budget and double our Google AdWords spend. If every PM did the same VRBO swill soon be off the first page of results which will signal the beginning of change.

    In the meantime all PM’s need to sharpen their game with guests originating from VRBO/HA. Educate your guests about the savings that come with booking direct (many don’t understand the fees they pay VRBO), offer special incentives to book direct and get to know your guests so they book direct when they come back.

    Reply
    • Betsy says:
      March 28, 2018 at 10:52 pm

      I am with you 100%!

      Reply
    • Matt Bare says:
      March 29, 2018 at 9:58 am

      I think a lot of people are feeling that way Robin! I’d urge you to look at a more integrated marketing approach increasing traffic from multiple channels rather than just pushing all of that budget into Adwords.
      There are lots of marketing opportunities available to increase qualified traffic!
      -Matt

      Reply
    • Lorraine says:
      May 1, 2018 at 5:07 pm

      Why aren’t owners confident in marketing their businesses online for direct bookings? It is time to jump in and make a big slash by harnessing the billboard effect: http://hotel.selmore.co.uk/ custom direct bookings theme.

      Reply
  4. Terry Moore says:
    March 28, 2018 at 8:12 am

    My take is that Expedia believes their continual dive in their stock is the result of missed funds and their subscription holders gaming the system. To them, trying to recoup this money is more important than maintaining good relationships and solving this together. They now view their subscription holders with suspicion. Rather than improving relationships they are stiffing the rules. They are now alienating even the best of us. Subscription holders can’t help but feel like they’re being perceived as HomeAway’s enemy.

    Reply
  5. Bob Bourassa says:
    March 28, 2018 at 5:15 am

    This is of general concern to PMs who rely heavily on HomeAway for bookings, and we have begun fielding calls from many about listing their rentals on the regional vacation rental sites that are members of our vacation Home Rental Network (https://www,vhrnetwork.com).

    Reply
  6. Jesse Martinek says:
    March 28, 2018 at 3:14 am

    Amy, are we thinking this pertains to any PM using ANY software provider? Does HomeAway own the relationship with the various PMS solutions to track data back? Certainly, we know what will happen with Escapaia/V12 users (per Steve Milo’s post last week)–but what about the Streamline/LiveRez/Cloudbed et al. users?

    I’ve been waving my hands in the air for 18 months trying to tell PM’s this was happening. We have 3,000 Listings because many of them believed me. It’s time to band together or these guys will break us apart.

    Check out our solution for more information.

    http://managers.vacayrx.com/

    https://owners.vacayrx.com/list-your-property-2/

    Reply

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Industry News for Vacation Rental Managers
March 27, 2018
mm
Amy Hinote @vrmintel

Amy Hinote is the founder and editor-in-chief of VRM Intel Magazine, which provides news, information and resources for the professionally managed vacation rental industry. With a background in finance and over 15 years in the vacation rental industry, Hinote has worked with property management companies, technology companies, intermediaries and investors, and provides insider information about the growing vacation rental industry. She also founded the data company, now known as Key Data Dashboard, which provides aggregated market intelligence and reporting for vacation rental managers. Hinote resides between Alabama's Gulf Coast and Evanston, Illinois.

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