HomeAway VRBO Service Fees and What to Do About Them
- John and Chris Candelario
- Nov 8, 2017
- 4 min read
We have been discussing with several vacation rental owners HomeAway and VRBO fees and how outrageous they are...here is the breakdown.
HomeAway fees which go back many names - service fee, processing fee, etc. have been pinching owner's pockets for quite some time now.
What are these fees and what can we as owners do about them?
HomeAway and VRBO have two models to list your vacation home rental:
1.) Pay per booking: Owners pay a fee of ~8% each booking placed through the platform, you cannot take payment off the channel and any attempt to can have your account deactivated
2.) Subscription Based: $399 a year
Now what is the Service Fee? This is a traveler fee that comes out of their vacation rental wallet share or budget - this ranges from 5-12% of the total booking. HomeAway / VRBO claims that this does not impact the vacation rental owner as the fee is passed down to the traveler, but this is a lie.
Each of your guests has a travel budget. For example, Todd and Jane have a $4500 vacation rental budget for a week-long family getaway at Disney. If the booking site claims 10% of the wallet share, that is $450 more expensive for the guest, meaning $450 you, the owner, is not collecting of their wallet share. This is a double whammy against the owner and the guest.
HomeAway / VRBO and their related travel sites are "Double Dipping" on fees, making you, the owner pay twice for their service.
Here is where your hard earned rental money is going:
Even if a guest has already rented a home and they are staying again - if they book through HomeAway they will STILL have to pay the service fee as part of their rental amount. They state this is for 24 / 7 tech support.
Now I hope you found the breakdown of HomeAway service fees helpful, but if you already know this information...I am not helping you much. This is where I give you suggestions on what to do to get around this:
1.) Take the payment off the HomeAway channel: You can circumvent your guest having to pay a HomeAway fee (and hopefully collect this money yourself) by speaking to them by phone if you are on a subscription, but you may be penalized in listing placement by HomeAway's algorithm. If they can't take their cut, they want to make sure they are promoting listings that ARE going to get them paid, putting their interests before yours.
HomeAway / VRBO also creates a challenge by explicitly telling guests NOT to book off the platform. Here is an example:
You can try taking payments yourself and this strategy may work for you, but please be aware of the consequences to your listing placement.
2.) Direct Mail: A whole article could be written explaining vacation rental direct mail marketing for owners. Basically, you can take your previous guest list and mail them a card saying "Greetings from the Brown Family" giving them a discount for coming back to your home next year. I have heard from guests that they LOVE this personal touch, and you are only paying for postage and the postcard. $2.00 vs. what you are paying for HomeAway is an astonishing difference and could mean big bucks for your vacation rental business. You can take this a step further by using direct mail lists targeting travelers to your area.
3.) FaceBook and Twitter: Instead of paying 10-15K or more of your rental income to HomeAway / VRBO, if you learn how to use FaceBook and Twitter Ads, you can experience the SAME results with half the market spend, boosting your profits. I will write a post on this later, and if anyone needs help with this, feel free to comment below.
4.) Management Company: Any vacation rental property managment company worth their salt will have a list of thousands of guests that have booked with them before and will be returning at some point in the near future. If you are having trouble booking, please contact a reputable manager to help generate bookings, but be warned. Ask them how much they are charging in addition to the HomeAway fees you are paying, or you can be doubling your advertising budget...if your property management company is smart with technology and marketing like mine is, they can actually make you money.
5.) Your Own Site and SEO Efforts with Blog: Showcase your home on your own website and advertise it with Google Adwords, SEO, and a blog with pictures, video, and other rich content. This will save you thousands and make you a lot of money. I have seen sites created that have cut out HomeAway all together by choosing rich keywords for their location. I do this for many homes in my inventory, so comment if you have questions.
Contact me by commenting below, please share if you think is helpful!
Support:
https://www.youtube.com/watch?v=Vi5sMdefHk4&t=314s
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