We asked: HomeAway boosts fees for 2018—but what’s the cost?

If you’re at all tuned into news circling the vacation rental industry, it was hard to miss HomeAway’s announcement on new 2018 fees making waves last week. We first came across it in Amy Hinote’s latest piece on VRM Intel.

The tldr:

  • HomeAway will increase subscription fees 25% (from $399 to $499 per listing)
  • In addition to this increase, for direct bookings from guests who previously used HomeAway in their travel research, they’ll charge a 10% transactional fee

In other words, for direct bookings made where HomeAway can attribute similar searches on their websites, they stand to take a piece of the pie—what they’re calling performance credit for “off-platform” bookings. Amy sums the cost increase in a way that puts it in perspective: this adds up to over $700k from an average vacation rental management company managing 250 properties.

But in the long term, what’s this big news really mean for rental managers at large?

Now that the initial story has had a little time to settle, we asked around to some of our friends (and foremost authorities in the industry) to see their initial thoughts, and recommendations for a path forward.

Take a peek at their insights below:


Alex Husner, CMO, Condo-World Resort Properties

“While I understand the reasoning behind wanting to prevent leakage of bookings off HomeAway’s platform, the most recent announcement has the potential to be a paradigm shift for what is deemed acceptable in vacation rental/OTA partnerships. HomeAway is learning from Expedia’s early days and is working to apply this hindsight as quickly as possible. Had technology been as advanced years ago as it is now, Expedia would have asked to match back email addresses/dates and to be paid a commission for any bookings that originated from a search on their site. Could Expedia do that now with their hotel clients? Sure…but the hotel/OTA relationships are far too involved and strained at this point to attempt something like that. HomeAway is still at a relatively new stage in their relationships with VRMs, many of whom are highly vested in the company from both a software and advertising perspective and consider themselves at mercy to any changes the company wants to make.

Between the addition of the booking fee a couple years ago, to removing the ability for VRMs to communicate with guests during the booking process, and now implementing a match back process to automatically recoup any bookings made off platform — HomeAway is making it hard for both guests and VRMs to want to do business with them. With this newest announcement, VRMs could potentially pay double commission and LOSE money if a guest searches on HomeAway but then books on another OTA. (Example: 10% to HomeAway and 15% to Booking.com = 25%… which is well above the average commission fee for most PMs).

Removing the ability to communicate with guests has also been troublesome for us—if HomeAway were to truly facilitate the booking from start to finish, we would have no problem with not being able to communicate with the guest. But to provide a lead—and then restrict what information can be sent, and how it can be sent—creates a customer service and operational nightmare.

Total OTA revenue only makes up 3% of Condo-World’s annual sales— but there are many in our industry who rely specifically on HomeAway/VRBO for up to 70% of their sales. All of our listings are pay-per-booking, so we are going to continue on with 2018 as normal and then evaluate the true effect of these changes at the end of the year.”

 

Stuart Butler, COO, Fuel Travel

“This is a greedy move and one that could backfire. There’s no way I will recommend that my clients participate in this new model. The notion that HomeAway claims 10% commission for bookings where a consumer at some point made a search on HomeAway is nonsense. We know that consumers shop around and look at the same property on multiple sites. What if they all did the same thing? Imagine if a consumer finds your property on the local CVB site, then shops you on HomeAway, TripAdvisor, and another local portal, before finally booking on your own website. Are you to give 10% commission to all four of those touch points? What if they also saw a retargeting ad for your property and that vendor also took another 10%?

My advice for rental managers is to boycott HomeAway. Spend your time crafting an amazing book direct strategy by creating a frictionless, mobile-first booking experience, applying psychological sales tactics through the funnel, and providing unique value and incentives to guests who book direct.”

 

Matt Raab, Director of eCommerce, Sterling Resorts

“I believe the move is intended to drive PMs away from their subscription program and onto their pay per booking program. When Expedia took over it was expected that the way HomeAway collects revenue would eventually mirror Expedia. The transition started with the introduction of pay per booking, then elimination of subscription levels, and now the latest changes. Within a year or two subscriptions either will not be economical anymore in comparison with pay per booking or be outright eliminated as an option.

Diversify and develop brand loyalty. We will be staying on the same path we began down long ago—with integrated software and connections partners most third party websites are easy to add as distribution channels. We utilize as many that make sense to us in terms of cost and rental policy.

With the right technology partners, there is not a manpower burden, and it makes a significant impact on the percentage of revenue that originates from HomeAway. Once the guest is booked, however—from any channel—the goal is to collect data, impress the guest, and rebook direct. This sector is where the most exciting new technologies and services are being developed.”

 

Even early on, the news is hard hitting. A vacation rental owner and manager in the Southeast went on to add this:

“Bold move for sure because they risk owners who will leave because of the increased pricing. Also, curious how they will access Vacation Rental Managers data to know who to “charge” other than Escapia and V12 users, as they can potentially access those databases because they are HomeAway PMS’s.

As a VR Manager, we are not, and will never be, in a position to pay websites which a guest visits prior to ultimately booking direct with us. That is ridiculous.

Our path forward will be to educate all homeowners as to why they should put their units with professionally managed companies who can help them better navigate the ever changing vacation rental market.”


We have a feeling this story is far from over. Got perspectives on this (or anything else bubbling up in the VR industry)? Join the conversation.

In the meantime, get the full scoop in the original VRM Intel article, and for more like this give Amy a follow here.

 

Flip.to on the road: property managers winning with OPMA

A big focus at Flip.to in 2017 has been better understanding the ins-and-outs of the vacation rental market. It’s a segment within our industry that faces all of the same, yet also entirely different challenges than other accommodations providers.

Issues range from regulations and split ownership, to homeowners’ associations and conflicting marketing messaging due to third parties. Navigating that space adds layers of complexity that any operator could easily do without.

When we learned about the Onsite Property Management Association (OPMA) and its efforts to advocate for property managers, we were immediately intrigued. Flip.to became members in short order and participated in our first OPMA summit in our hometown of Orlando this past November.

What we took away is that OPMA has made great strides for property managers—and are working hard on loads more to be done. Topics covered included recent legal victories, paving the way for a better guest experience, all the way to the importance of adopting a mobile-first approach, well, everything.

Our resident video-documentarian and fellow Flip.to contributor to the blogosphere, Hunter Garrett, joined me at the OPMA conference and put together these highlights of our 2-days at Reunion Resort. Enjoy!

 

Advocacy at work: Reunion Resort taps into inspiration with Flip.to

At Flip.to, we’ve made our careers in hospitality. A lot of our customers are industry folks who we have a long history with and we’ve developed a lot of friendships along the way.

Reunion Resort’s Carolina Ousley is one of those friends. She’s been a great leader in marketing since we’ve known her. Our own Richard Dunbar paid her a visit recently during OPMA’s Executive Summit. (More on that to come soon.)

Carolina had some kind words to say, and we’re just ecstatic to share them. Take a peek:

 

Feel free to give Carolina a follow here. And if you’re interested in how advocacy is a game-changer for hotels & resorts, let’s chat. 20 minutes is usually all it takes to kick-off.

(And since we know busy hoteliers don’t have too much time to spare, we do our best to make those minutes as fun as possible.)

Hotel Tybee strikes Gold at 2017 Adrian Awards with Flip.to

Customer success: we can’t stop talking about it. That’s because the results earned by travel brands on our platform are the biggest measure of our success.

So, when other people start talking about it too? Well—we can’t help but celebrate.

That’s what we’re doing today with Hotel Tybee, who we’re proud to be recognized alongside for taking home a 2017 HSMAI Gold Adrian Award in Digital Marketing! Hotel Tybee’s success on the platform stood out among a crowded field of more than 1,100 entries.

So what’s advocacy at work look like with Hotel Tybee? When you see the numbers, it’s clear why the judges took note. Take a peek below:


In 7 months and 898 advocates, the property earned:

Hotel Tybee Success

Hotel Tybee’s advocates drive incredibly warm traffic and high conversion for pennies on the dollar.


Brett L. Loehr, CHA and General Manager to Hotel Tybee had this to say about the platform:

“Today’s reality is that it’s more expensive and competitive to earn guests. Add to that other investments we’ve made in our hotel following three hurricanes just this year, and the importance of growing profits without sacrificing hospitality for our guests comes even more into focus.

We’ve got a strong marketing team who together with Flip.to have done both. For one thing, we’re getting in front of interested travelers in the best way—our existing guests—and the numbers tell the story for what follows.”

Advocacy is a potent marketing channel that properties like Hotel Tybee have unlocked. With trust built in, quality of the audience is a natural lead into great performance.

Stacia Miele, Online Marketing Director echoed Brett’s sentiment.

“Hotel digital marketing isn’t a matter of doing one thing really well—it’s doing a lot of things really well that come together into a strategy that works for your property. Flip.to has been a great add to our stack, with the value of this new marketing channel going beyond lower cost-of-acquisition.”

“All in all—we’ve been huge fans since the beginning,” Brett went on to add.

For a peek at just a handful of what Hotel Tybee’s storyteller’s are sharing, tune in below:

 

If you’re ready to switch on advocacy, let’s chat. We’ll share how advocacy is changing the game for the hospitality and tourism industries worldwide.