Today TripAdvisor implements a new fee structure for vacation rental managers bringing parity to their pricing model for vacation rental listings.
Yesterday, TripAdvisor sent an email to property managers that their fee would be lowered to 3% with an additional traveler fee for guests booking vacation rentals through their websites.
This move is welcome news to property managers who complained in an open letter to TripAdvisor CEO Stephen Kaufer that said, “Properties that are professionally managed are being charged a significantly higher commission (10%) than those that are owner managed (3%). This practice makes no sense and, if anything, managers should get a discounted rate since they list in bulk and are business partners…Please let us know if TripAdvisor is willing to offer Property Managers the same 3% pricing model on the ‘Pay on TripAdvisor’ as TripAdvisor offers rent by owners with 5 properties or less.”
TripAdvisor initiated a traveler fee for owner-managed properties earlier this year imitating Airbnb’s pricing model which proved that travelers are willing to pay an additional fee for bookings. Last month HomeAway announced they would be also adding a traveler fee for reservations. Priceline’s Booking.com has not implemented a fee for travelers for vacation rental bookings.
According to a Skift article written by Dennis Schaal, “TripAdvisor’s introduction of a traveler fee on vacation rentals by property managers will not necessarily be material to TripAdvisor’s financials in the short term because vacation rental transactions are not material to TripAdvisor at this juncture. But those traveler booking fees could be material to TripAdvisor in the future.”
Schaal continued, “TripAdvisor’s decision to begin charging travelers’ a fee for vacation rentals from property managers will please Wall Street and could put pressure on Booking.com, which adamantly eschews such fees for all of its vacation rentals, to do likewise. On the other hand, much as HomeAway saw a competitive advantage for years in not charging a traveler fee while Airbnb and others did, Booking.com management could stick with its beliefs and continue to avoid turning off consumers with booking fees.”
By Amy Hinote