In just the last few months, on the heels of corporate takeovers that will consolidate the lodgings industry in a way never before seen (can you smell the monopolies?), two major players have announced that they will be adding traveler fees to transactions involving vacation rentals.
Flipkey, a division of TripAdvisor, was the first to pounce, with fees that debuted on December 9, 2015. It’s going to be using a sliding scale for travelers, who will pay 5% to 15% of the cost of the rental to the company. That fee will kick into place when the owner or property manager of the rental is paying a commission to Flipkey (those commissions, which are paid when a property is listed for free on Flipkey, are dropping to 3%, presumably because consumers will now be footing the bill for the listing).
HomeAway, the mighty company that owns VRBO, CyberRentals and 19 other travel companies, was itself gobbled up by Expedia in November. In a call announcing the acquisition on November 4, CEO Brian Sharples let slip that HomeAway would be tripling its revenue by instituting a booking fee for consumers that would average 6% but be applied on a sliding scale. Not only that, HomeAway would be strong-arming property owners to make all their bookings online ones by the end of 2016. Currently about 50% of the properties listed on Homeaway accept payment off-line, which means that on those bookings, travelers don’t have to cut HomeAway in on the deal. HomeAway is threatening to boot properties that continue to transact payments offline, again by the end of 2016.
Of course, fees aren’t new to the rental industry. AirBnB has been charging a 6% to 12% consumer fee since its debut. But these moves will make the practice far more widespread, and could significantly increase the cost of renting an apartment, villa or vacation home, sad news for travelers.
So what should you look at now if you’re considering a vacation rental? Here are some tips:
- Factor in ALL costs before booking. Along with these new fees, rental often carry a cleaning fee, which can up the overall cost significantly. In Europe, and some other parts of the globe, travelers are also expected to pay fees for the rental of linens, the payment of utilities and other items necessary to a stay.
- Be sure you’re getting what you’re paying for. Because they get fewer guests per year, individual rentals will have fewer reviews about them than hotels. And the quality of rental reviews can get skewed by the fact that guests are being reviewed by the owners. If a guest gives a really negative review of a place, its owners could punish him with a negative guest review, making it harder for that individual to rent in the future. So look at as many pictures as possible before renting a place (if there aren’t many provided it could be that the owner has something to hide) and ask a lot of questions.
- Check to see if someone will be available nearby to help should something go wrong with the rental. This could be a management company or a friend of the owner, it doesn’t matter. What is important is that you have someone to call should a pipe burst, you lose you key, or some other emergency occurs.
- Know what company you’re booking with. If you see an apartment listed on Expedia, Orbitz or Travelocity, it will likely be from the stock of Homeaway and carry the fees listed above. Those apartments you see on TripAdvisor are from Flipkey.
- Consider going with a fee-less company or a local company: Booking.com is the final hold-out among the majors, and it does not plan, at this point to add booking fees. In addition, the former price difference between booking with a multi-national company, and a local company, may be shrinking thanks to these new fees. Not only that, but when you book with a local company, you have someone who is vetting and inspecting apartments on the ground; you definitely have someone to call should something go wrong; and in the worst possible scenario, who have an entity that could potentially move you to another place should the first rental be unacceptable (this isn’t always a given with local companies, but it’s more likely than with the majors).