Skip Booking Fees!

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Owners and renters of Vacation Rentals may not be aware of the recent changes to Vacation Rentals By Owner (VRBO) after its acquisition by Expedia. Expedia purchased VRBO to serve as direct competition to newer sites like FlipKey and AirBnB.  Prior to the acquisition, there were various tiers or levels an owner could pay for a VRBO listing.  The different tiers had different benefits which could improve placement in the listings and searches on the site and the number of photos you can have on a listing.  Now, all owners pay the same flat fee to list a property if the property allows online bookings and a higher flat fee for properties that do not.  The biggest change is the use of an algorithm to determine the listing order and a service fee of 10% with a cap at $399 per booking paid by the renter to VRBO.

For Owners these changes can drastically affect your bookings.  The fees for listing the property can be significantly higher than those they were previously paying.  The “performance algorithm” that now determines the rank of a listing punishes those who prefer to deal with inquiries off of the site or in direct contact with the inquirer.  Meaning if an owner responds to an inquiry via the inquirers contact info and not through the VRBO site, the owner does not get credit for responding to the inquiry.  The listings are now showing response rates, for example “avg. response time: 2 days.”  Using the algorithm limits what an owner can do themselves to improve their position in rankings and leaves it up to the algorithm to essentially “guess” whether a renter would be interested in the property.  In addition, some owners have already noticed less bookings as renters get “scared off” by the service fee.  The additional money on top of the rent rate is pushing renters to seek other avenues. Renters are not as affected as owners with the changes except for financially.  If you rent a property for a month at $2000 who would really want to spend an extra $200 in service fees to VRBO?  Those monies could be used for food, activities, shopping, or other ways that benefit the renter and not a company who acted purely as a middle man.

So how can you save 10% on your next vacation rental?  As a renter you can search for a Vacation Rental Management (VRM) company, such as Vacation Rentals of the Desert, in the area you would like to stay.  If you aren’t finding a company during a quick google search you can call a local visitors bureau or chamber of commerce and they can most likely give you a list of professionally managed companies to try.  For owners, you can try listing your property with a VRM company who generally only take a commission for bookings and do not charge an additional fee to the renters or a listing fee, although some may.  VRMs can also negotiate between the renters and owners, from an existing client list in addition to new inquiries, to find a rate that satisfies both parties involved from an existing client list in addition to new inquires.

Post by guest blogger Vacation Rentals of the Desert Employee David

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