When HomeAway sent an email to vacation rental managers on December 14 introducing a pricing increase for subscriptions—along with a new fee for off-platform bookings—the vacation rental community sat up straight.
The email said, “HomeAway will begin charging a fee for every off-platform booking, which will amount to 10% of the pre-tax total to be charged to the traveler for the stay.”
“Off-platform bookings” were defined in the email as “bookings that originate via HomeAway but are not processed through HomeAway checkout.”
The email also said, “All partners wishing to purchase a new subscription or to renew a subscription with a start date of March 15th or later (even if paid in advance), must first acknowledge and agree to these terms and provide payment-card information to be kept on file for processing of off-platform-booking fees.”
The news resulted in numerous reported communications between property managers (PMs) and HomeAway representatives seeking clarification about how this announcement was going to be implemented. PMs reported and shared email communications indicating that HomeAway would be comparing traveler activity on HomeAway’s websites with booking activity within integrated software to determine which internal direct bookings should be attributed to HomeAway.
However, HomeAway chief commercial officer, Jeff Hurst said that was never going to be the case.
In an interview with VRM Intel on Monday, Hurst said that this (off-platform activity) was a known loophole at HomeAway that “we didn’t have the enthusiasm to close.”
“We thought it would naturally go away, and it didn’t,” said Hurst.
Hurst used the example of an executive colleague who found a vacation rental on HomeAway that was managed by a large property manager. Through the inquiry process the colleague was overtly encouraged to complete the booking directly with the manager.
“Our intent [is] if a guest finds a PM through our sites, and the PM believes we created value, we get credit,” said Hurst. “If you believe we created value, pay us, and we will go about our merry way to add more value for you.”
He added, “We think 10 percent is a reasonable price.”
In the interview, Hurst maintained that the original policy was to allow property managers to choose for themselves which off-platform bookings they would like to attribute to HomeAway. “[The idea that] we were going to unilaterally go in and charge 10 percent was not the case,” said Hurst.
According to Hurst, PMs will have the freedom to indicate which reservations they think should be attributed to HomeAway and for which they will pay the 10 percent fee the company. He also said that rankings on HomeAway’s sites would be positively or negatively impacted by the number of these reservations that a PM decides to attribute.
Hurst clarified that bookings done on the phone would not be expected to be attributed to HomeAway as contact phone numbers have been removed from HomeAway’s listings. “If the PM’s phone rings, they found the PM through another source,” said Hurst.
Hurst disputed reports from PMs that HomeAway representatives reached into the property management software to provide projections on off-platform booking activity saying that these projections were likely “based on the number of bookings the PM attributed to HomeAway last year.”
In a separate email to the VRMA and FVRMA boards, Hurst said, “HomeAway does not have a policy to search property managers data for bookings that should be attributed to HomeAway.”
One Florida-based property manager questioned the effectiveness of the new policy. “What would possess you to pay 10 percent of a booking to get a small bump in ranking? It is just a joke.”
On Thursday, Cliff Vars, general manager at HomeAway Software sent a follow-up email to PM clients saying, “We will enable you to be the sole decision maker for identifying which bookings are attributed as HomeAway off-platform bookings, and we will release those changes along with information on how they will work before the 3/15 marketplace changes go into effect.”
“We want to get paid when we create value,” said Hurst.
HA gives us 4% of our revenue and 100% of our credit card fraud.
YapStone is by far the worst in the industry.
Not enough traffic. Too much risk
The ROI just isn’t there…we’re pulling all our properties off of HA.
I was listed in Vacationrentals.com from 2005 to 2017. I paid subscription starting $199/year increasing to $399/yr. Nothing else. They then added all these bells and whistles. I DO NOT WANT THESE SERVICES AND NEITHER DO MY GUESTS!!! Everything is a lot more difficult with third party in the middle. Of course they have right to do what they want. And we owners have right to list through them or not. The problem right now is that they have practically monopoly with the large number of users they have acquired over the years. They gave us little finger and now they took the whole hand. I am optimistic that someone will have the resources to start the good old fashion vacationrental site. There is huge demand for it.
We are still trying to work out what HA define as adding value. If there is a refunding issue or a guest wishes to change dates, the service fee the guest has paid, is not spent on service. Assistants is provided by the owners and managers.
It’s time to find out if you have a vision that includes being in control of your own destiny, or wish to be pushed around by companies are far removed from the business we created.
It’s a huge over-reach by HA/VRBO and the opposing reaction of VR Managers is fully justified. Since when did anyone get a commission for showing information about your properties? There would be no end of claims to our revenue if it worked this way. You have to bring the customer to the door with cash in hand to say that you are providing value.
Yes, it is time to consider a world without them. There are many resources out there to help make this change, and a plethora of fledgling listing sites rushing to fill the void that has been left as HA/VRBO moved to become an OTA.
Do it!!
Hi Robin, completely agreed! Check out this company- http://www.gonitely.com. Pretty cool what they do and they take the headache away from dealing with all the hassle of payment.
Value of VRBO is paid for in advance every year for the listing. Value has decreased for us substantially when outside links (for instance to our website) were disallowed. 10% is beyond extreme. We do discuss HA payments with every one who contacts us. Every single client prefers not to pay admin fees associated with the rental. I cannot be expected to turn them away because of this. VRBO does not generate sales. It is a listing. It used to be a valuable one which I was more than willing to pay top dollar for. Now it feels like they are setting me up to get sued for withholding a percentage of rental fees. It all seems very vague, carefully worded and dishonest. I never received a letter in December.
We have repeat guests who sometimes communicate through HomeAway. It is the property and our service that brings them back, not HomeAway. Some of these guests realize that they can save 8-10% in credit card fees and HomeAway processing fees and they will not book through HomeAway. Are we supposed to turn these guests down?
Fascinating tactics. I have also heard that Trip Advisor/ Holiday Lettings are going the same way this year. Time to leave the big boys to their games and go somewhere with a longer commercial vision rather than a short term money grabbing objective.
Book direct with owners, cut out all the middle men and their unjustified commission charges!
I am so happy that we cut the cord with HA. They want more from commissions without doing much to earn them. It’s time for members to move on.
I remember when us vacation rental owners were a “Valuable Partner” to HA/VRBO. Over the years, I’d be including in conference calls with their “Engineer and New Features Department” to pick my brain on how to add value for hosts and guests. For years I refused to sign up with Airbnb because I thought their model of “no contact with guests prior to booking” went against best practices and giving a potential guest the opportunity to know there is a real live person ready to pick up the phone and answer questions or concerns by talking to a real person over the phone before booking. I now have all 4 of my homes on Airbnb because I see no difference between them and HA/VRBO. I closed my PayPal credit card account the day HA started accepting credit cards because it was so much more convenient to let them handle all that for me. I can clearly see that the partnership and loyalty I once felt between myself and HA is long gone.
Well, I never received any communication from Homeaway during December and this is all news to me! I definitely will not be renewing my contract next year
Greed will put HA out of business. Our inquiry and bookings though this site are now neglegeable. Used to be exceptional. Not too many owners and property managers are happy with the HA new platform and method(s) of doing business.
They are using internet technology ineffectively and alienating both the owners and guests. Don’t wish bad outcomes for HA. It is however inevitable, that without change, the cavalier approach they are taking will ultimately lead to their own demise.
It’s not about willingness to pay a fee. The main reason property owners like customers to book direct is because Home Away does not allow payments to be made to owners until they arrive despite taking bookings and payments a year or so in advance and allowing customers to cancel right up to arrival. This is not a viable option for a business and is why larger and better quality property owners are leaving Home Away in droves. Eventually only the tosh will be left.
Airbnb’s business model works this way and it has been working well for us. They collect payment and file taxes at a local and state level in our area. Regardless if there is fraud involved which is uncommon in the Airbnb platform, payments are issued to hosts (It happened one time in over 6 years). On the other hand, HomeAway’s business model is different, as a manager you process guest credit card in advanced according to your rental policy not theirs. You are also responsible to verify guest identity to prevent potential fraud.
Very disappointed in the turn HomeAway/VRBO has taken in the last couple of years. In addition to the time it will take me personally to confirm whether or not off-platform booking guests emailed us FIRST and then provide that evidence to HA/VRBO, we now have to tell guests who contact us that they should book on VRBO because they will be “protected by the Book with Confidence Guarantee™” providing, of course, the guest meets all other eligibility criteria, and that this guarantee “provides protection against the following: (i) Internet Fraud; (ii) Wrongful Denial of Entry; (iii) Material Misrepresentation; and (iv) Wrongful Deposit Loss (the “Protected Incidents”)” – all of which make it seem that our company is not to be trusted basically. This is not the friendly, helpful HA of several years ago. This once great company is becoming petty and quite disagreeable; which I first began to notice at the last year’s RezFest. I hope they come around.
We pay a listing fee for every property we place on the HomeAway platform. That is to pay in advance for the “Value Created by HomeAway”. Paying an additional commission for each listing is going beyond a fair value for what a listing service provides. HomeAway is not communicating to potential guests in anyway to help in the sales process – only displaying information about a property as a listing. Additionally, In some markets, as a PMs we can only collect 15% from a homeowner. Paying a listing fee, plus 10% commission to HomeAway is a bit much. If they want a commission, they should operate like Booking.com and it should be free to list your property.
Spot-on! HA value is in the listing represented the yearly fee I pay. Recent practice of masking guest contact info until money is exchanged prevents off-platform contact and sneaks around the 10-percent off-platform fee. I pay for listing exposure, not for their constant meddling and destructively clever control of it.
Ask for and read the contract/PO for PPB listings. There is already language in there allowing HA to do all that Jeff Hurst just denied doing including monitoring and auditing our rental information to identify off-line bookings and assess the “fee”. In the contract they say that they can ask for these audits from you at any time, but if you are integrated then it saves you the trouble of doing the labor. And… as he also appears to have denied above, my sales rep provided me an estimate of the number of our 2017 confirmed bookings that would have been assessed the 10% “fee”. It was high. And we did not indicate in any way, in any place, that these were off-line bookings to be attributed to HA. While I have not been vocal about these changes before, I am offended by what Jeff Hurst said above since it directly conflicts with the PPB contract I presently have in my hand.
http://www.ECBYO.Com – no booking fees with Emerald Coast by Owner. It is a regional website. The company will be creating many regional websites for different areas.
“HomeAway does not have a policy to search property managers data for bookings that should be attributed to HomeAway.”……clever wording. Does this extend to integrations partners? This is the pattern of these rollouts…make policy announcement …….let the owners/pm’s complain….tell the owners /pm’s they are confused…..wait a few months….go back to policy change. We have seen the movie…time to change the channel.