What’s this Vacation Rental Fee?
If you book a vacation rental home online, chances are you will pay 15% to 20% more than you should or even need to. That’s because well-known Online Travel Agencies (OTA’s) like VRBO, HomeAway and Booking.com charge the renter a service fee. With heavy use of scare tactics, the OTA’s assure guests they will be protected when reserving through their sites. They warn you not to communicate with the homeowner off-site because you won’t be protected.
Truth be told though, it’s your credit card required for payment that’s offering the protection. Go ahead and search any of the OTA guarantees and you’ll find that one of the first steps in any resolution is to work with your credit card company!
The OTA’s don’t want you to work with the homeowner off-site because they’ll lose their fee if you pay the homeowner directly. I don’t necessarily begrudge the OTA sites from collecting a fee from the renter if they aren’t already collecting a fee from the homeowner. They have a right to make money. But when overall fees charged to both the homeowner and renter easily surpass 25% the rental rate and the OTA is dictating how the homeowner should manage their multi $100K investment, I get a little annoyed. Keep in mind that this rate is higher than many property managers charge!
Are OTA’s Listening to Complaints About Fees?
You bet they are! They don’t want their customers (i.e. rental guests) angry with them. (In OTA lingo, renters are the customers and homeowners supply the inventory.) But to ensure that they continue to make oodles of money off the backs of the rental home owners, they need to shift the anger away from themselves.
Instead, they’ll shift the charge to the rental home owners. This 15-20% fee becomes a new expense for the homeowner. If the homeowner eats the cost, they’re whittling away at any profit margin or going negative. Most likely, the homeowner will just pass this new cost to the same people who are complaining about the high fees — the rental guests! And to make this even more painful, when this fee is collected as part of the rent, the guest will also have to pay lodging tax on it. Double burn!
In Spring 2019, AirBnB was beta testing this strategy. As an incentive to get the homeowner to agree, the property owner earns the “fee-free” badge on their listing as a reward. Vacation seekers who aren’t paying attention and who are frustrated with fees are going to gravitate towards these “fee-free” listings not realizing that they are paying more than before!
An astute homeowner will increase their rental rate to cover not only this 15-20% fee, but also increase the rate further to recover the 3% credit card fee charged them by the OTA on the money collected from the renter. The homeowner will, hopefully, net the same after expenses and AirBnB will still get their hefty percentage fee. You can read more about this AirBnB Beta testing here: https://thepointsguy.com/news/airbnb-considers-getting-rid-of-guest-fees/
It’s time to find that same perfect vacation rental and avoid the $150, $300 and even the $500 fee. But where to look and find the place easily? You need a listing site, not an Online Travel Agency (OTA).
Where To Look Without an OTA Fee?
Note: There may be additional suggestions in my other blog post regarding finding a vacation rental. https://beachdelight.com/fee-free-vacation-rental-listings
Vacation rental listing sites act like classified advertising for the homeowner with the additional perk of providing you homeowner contact information immediately. Phone, email and some even offer chat messaging. There’s no reason to keep owners and renters anonymous since the listing site is not collecting fees on reservations.
Users of the listing site can search just as they would on an OTA site. For homeowners that choose to advertise on both OTA sites and listing sites, you’ll oftentimes notice that the postings are almost identical. Owners are just being practical and copying the same info between their various advertising venues. However, keep in mind that not all owners will advertise on OTA sites because the OTA applies rules that violate their own business or locale rules/laws. You aren’t guaranteed to find the same properties between the various sites.
Tell Me About Listing Sites
Many listing sites are newer and don’t have the same financial power as these OTA’s to pay for search engine placement. As these listing sites become more well-known and familiar, you can expect them to show up in your Internet searches. For now, you’ll want to add the following bookmarks to your browser. By sharing posts like this one, you can help spread the word.
One of my new favorite up-and-coming world-wide listing sites is Houfy.com — House For You. Houfy hopes to gain search engine traction because the site also features Guides and Stories written by property owners who list on their site. It’s a great resource to learn about the area you plan to visit and read what the homeowners are saying.
Houfy also has a world-wide map with pins marking all the properties. Check it out: https://www.maps.houfy.com/
There’s a whole network of vacation rental sites all developed by the same team and purchased by independent property owners in that region. All of these sites are linked from vhrnetwork.com and all operate similarly. To spare you the long list of underlying sites, I suggest you go directly to vhrnetwork.com and see what’s there.
Are there other listing sites?
Some listing sites have been around even before OTA’s existed. Others are newer and just getting a following. Many cater to specific vacation areas.
Here’s a list of other fee-free sites that encourage open communication between owner and guest:
- vermontproperty.com (Vermont)
- www.calivacationrentalsbyowner.com (California)
- www.covacationhomes.com (Colorado)
- www.delawarerentalsbyowner.com (Delaware)
- floridarentals.com (Florida)
- emeraldcoastbyowner.com (Florida)
- pcbeach.com (Panama City Beach, FL)
- www.30ahomerentals.com (Route 30a, FL)
- www.gulfcoastrentals.com (along Gulf coast, Florida)
- hawaiichee.com (Hawaii)
- weneedavacation.com (Cape Cod, Martha’s Vineyard, Nantucket, MA)
- www.marthasvineyardrentals.org (MA)
- www.rentalbug.com (Michigan)
- www.adkbyowner.com (Adirondacks by Owner, NY)
- www.catskillgetaway.com (Catskills, NY)
- www.capemayvacationrentals.com (New Jersey)
- www.capemay.com (New Jersey)
- ourtownrentals.com (New Jersey)
- www.shorevacations.com (New Jersey)
- www.shoresummerrentals.com (New Jersey)
- www.vacationrentalslbi.com (Long Beach Island, NJ)
- www.hockinghills.com (Ohio)
- www.chincoteague.com (Virginia)
- shenandoahcabinrentals.com (Virginia)
- stjohn-villarentals.com (US Virgin Islands)
- cottagesincanada.com (Canada)
- www.sayulitalife.com (Mexico)
- www.spain-holiday.com (Spain)
- www.lakehousevacations.com (Lakehouses nationwide)
- www.mountain-lodging.com (nationwide)
- www.americansnowbird.com (US, Canada and Mexico)
Other Places To Look
- Google Maps – Google will show maps and pinpoint vacation rentals. Many owners are creating Google Business Pages. You may need to zoom in closer to have Vacation Rentals show up in the map area you’re looking.
- Browser Searches (Bing/Google/Yahoo et al) Many owners also have their own Web sites. Check beyond pages 1 and 2 of your search output. My property Web sites are VacationRentalsInVermont.com and BeachDelight.com
- Facebook Groups/Pages – Use Facebook search bar to find vacation rentals in the area you’re planning on visiting. The Page names are likely the names the owners have given their properties. For example, mine are “The Green Cottage on Lake Champlain VT” and “Beach Delight Vacation Rental Home“
Always Practice Due Diligence
I list my properties on a few of the sites above. Others I’m aware because someone else let me know. Regardless of using one of these sites or an OTA, you need to follow due diligence to ensure you are booking a property from the legitimate owner or property manager.
See if the property is advertised elsewhere. Is the contact information the same in all places? Call the phone number and talk to the owner or property manager. Ask a simple question about the area that an owner should be able to respond quickly. (ex. How far is the nearest Walmart? What’s best grocery store to shop in the area? etc.)
Some locales have government property records online. You can search to see the owner of the property. Keep in mind though that some property owners do NOT like to disclose the exact property address to avoid criminal activity at their property when the online calendar shows the place is vacant. Remember that you are a stranger to the homeowner as well. They have a large investment to protect.
The vacation rental properties are out there. At some point, property owners will have to increase their rates to cover their expenses. Corresponding OTA fees will go up too. This could price the property outside what the market will bear.
Homeowners will need to ensure overall lower cost options for their guests. They will continue to build their own Web sites, advertise on listing sites and use social media to get known. They will also network with past guests.
Searching for the perfect vacation rental may be a little more involved because you’re looking at multiple sites. But you’ll be confident you’re saving money that could be better spent on your actual vacation when you book direct.