In Part 2, we examine additional problems experienced by vacation rental managers in recent months, along with the reported lack of rate parity between professional managers and individual homeowners and the ways TripAdvisor handles vacation rental reviews differently than hotels, restaurants and attractions -along with the negative impact of these issues on vacation rental management companies.
More customer support and technology issues
Like Justin Ford, Amy Gaster, co-founder of Tybee Vacation Rentals in Tybee Island, GA, recently decided not to renew their contract for over 200 property listings with TripAdvisor.
“We are taking a risk by not having a presence on one of the largest travel websites in the world,” said Gaster. “It was a difficult business decision. We have been spending over five hours per week just trying to get our issues resolved with TripAdvisor. But with no response from support, no way to talk to someone, and no resolution to our laundry list of issues, we were forced to pull our listings.”
Tybee Vacation Rentals sent the following email outlining their complaints to TripAdvisor -before making the decision not to renew their contract -in a final effort to get a response from anyone on their team who might be able to help resolve their list of issues.
To whom it may concern:
I have yet to have been able to make contact with anyone regarding the potential of renewing our advertising agreement. Despite being long time customers and having always had an individual account manager who would personally call to negotiate our renewal, we have been without one since Connor Gavigan’s departure in February. As you can see from the generic email sent to us on May 10th it seems as if your company doesn’t even realize he is no longer there given he is who is listed as the contact.
At this time our company is not planning on renewing our advertising agreement due to the persistent communication issues and functionality problems with the API. These include issues with activating and deactivating listings, managing reviews, rates, calendar updates, etc.
Despite being assured that with our switch to V12 that we would have a fully functioning API feed we have had nothing but continual issues. I would assume that your company would take seriously issues of this magnitude – as I can assure you having our staff continually being berated due to incorrect listing data is not our goal in advertising with FlipKey/TripAdvisor.
Unless we can resolve all distribution issues as well as increase communications, as mentioned previously, we will be forced to seek out other listing distribution options. Please provide me with an updated account manager so that we can discuss in detail.
Another large vacation rental management company owner in Florida, who wished to remain anonymous, said, “While I respect and admire the ambitious vision of Stephen Kaufer and TripAdvisor to create a transactional marketplace for the vacation rental consumer, the actual execution from the Vacation Rental division is one of utter incompetence and chaos.”
He continued, “The problems with that division start with Dermot Halpin, President of the Vacation Rental division and extend to Tracey Zhen the General Manager – both of whom are masters at the lack of truthfulness to its clients in terms of technical problems, content integrity and pricing issues. The chaotic culture and abusive culture towards clients has led to a revolving door of experienced employee departures which has further exasperated the issues. Until the issues with senior management at Trip Advisor are addressed, the vacation rental division will continue at a rapid pace to ruin its previous good will among large property management companies in the industry.”
With the reported ongoing issues, a group of professional vacation rental management companies have united to write a formal complaint about the poor service and support at the Vacation Rentals Division to TripAdvisor CEO Steve Kaufer.
Rate differences for professionally managed and owner managed vacation rentals
Like most online vacation rental marketplaces, TripAdvisor is moving to a transactional business model, charging homeowners and managers a percentage of the transaction (and in some cases, an additional fee to guests).
According to TripAdvisor CEO Stephen Kaufer in last week’s Q2 2015 earnings call:
In vacation rentals, our ongoing shift to a transaction-based model continues to progress nicely. Users can choose from more than 720,000 properties and we continue to focus on adding more high quality inventory. We’re also in the process of refreshing our owner center, creating a simpler, more engaging and unified experience.
The financial benefits continue to shape up nicely as transaction revenue accounted for more than 50% of our Q2 vacation rentals revenue. We like where we are in our shift to the transaction model as it is beneficial for travelers and homeowners alike…Where I see vacation rentals being in the future, I would expect it to be almost all transaction oriented.
However, TAVR is charging a 7% transaction fee for professionally managed listings while they are charging homeowners only 3% -with an additional percentage to the guests (mirroring Airbnb’s model for individual homeowners).
While TripAdvisor Vacation Rentals currently offers subscription pricing and Pay Per Lead pricing (a model that HomeAway phased out this year) to property managers, the difference between transactional rates for vacation rental managers and vacation rental homeowners has angered some property managers.
As part of a response sent to VRM Intel from TripAdvisor Vacation Rentals GM Tracey Zhen, said:
While property managers always have and will remain a fundamental part of what we do, another key change this year and last has been our increased focus on homeowners as demand to list independent properties continues to rise sharply in the vacation rental market. Property managers – which have sometimes thousands of properties and require account managers, custom technical integrations and more – have different requirements to independent homeowners. We’ve set our rates to match these requirements, and these rates are very much in line with industry standards.
Difference in treatment of vacation rentals vs hotels, attractions, and restaurants
On TripAdvisor, vacation rental reviews are only seen if that vacation rental owner or manager pays to list the property on the site, while reviews of hotels, restaurants and attractions are visible regardless of a monetized relationship with the supplier.
“If you are a hotel, your hotel gets listed on TripAdvisor regardless of whether or not the hotel pays for advertising,” said Gaster. “However, if you want your rental home listed for reviews, you have to pay. Vacation rentals are treated very differently by TripAdvisor. As soon as I stop paying for my homes on TripAdvisor, my 3,000 reviews go away too. Our vacation rental travelers have lost their voice.”
Negative impact for vacation rental managers
With the recent high turnover, TAVR’s new employees may not fully understand the impact their technology shortcomings and lack of response has on a vacation rental management company. While the frustration levels are high and PMs are forced to divert time and resources to address issues with TripAdvisor listings, property managers are experiencing more critical consequences from the problems at TAVR.
Impact on the PM business and their relationships with homeowners
First, vacation rental managers are service providers for homeowners, and providing listings on marketing channels (such as TripAdvisor) is part of that service. When the home listings are inaccurate, property managers receive complaints in the form of angry emails and phone calls from the homeowners they represent. The relationship with TripAdvisor directly affects the relationship the manager has with the homeowners. The issues are causing a reported loss of business, revenue and good will for vacation rental management companies.
Legal issues with the misrepresentation of vacation homes
Second, there are legal concerns with misrepresenting a home or advertising a home not under management, and in several U.S. states, it is illegal to advertise a rental home without a contract with a homeowner.
One vacation rental manager ended a contract with a homeowner and removed the property from his software system, but the home remained on TripAdvisor. “We couldn’t get them (TAVR) to take it down,” said the manager. “After many heated discussions with the homeowner, they eventually sent us a letter from an attorney threatening to sue us. It wasn’t until we sent the attorney’s letter to TAVR that we were able to get any response.”
As TAVR service and support issues escalate, vacation rental managers are being forced to remove their listings from the TripAdvisor platform to avoid negatively impacting their own business performance and relationships with their homeowners. The cost is that thousands of reviews disappear along with the listings, as vacation rental reviews only appear on TripAdvisor for paid listings.
By Amy Hinote