Skift Take

HomeAway is making a big bet on its pay-per booking model, but some financial analysts believe it hasn't taken off as expected. HomeAway states that the soft launch "was very recent" and the beta sample too small to get an adequate assessment.

After soft-launching a pay-per booking model to supplement its longtime subscription-fee model over the last few months, HomeAway has officially launched its performance-based system.

At the same time, HomeAway has also launched a Professional Referral Network of 40 partner companies that vacation rental owners can contract with to manage their listings and handle all guest inquiries and reservations.

Until the soft-launch this summer of pay-per booking, homeowners and professional managers paid subscription fees to display their vacation rentals on HomeAway sites regardless of how many bookings they took.

That system remains in place, but vacation rental owners now have an additional option:  They can choose the pay-per booking model instead and pay no subscription fees, but then they must give HomeAway a 10% commission for each booking.

Importantly, the guest pays no booking fee under this arrangement; the only fee is the 10% commission the homeowner pays.

“Unlike several performance-based companies in the industry, HomeAway continues not to charge travelers a booking fee,” HomeAway states.

Without naming names, HomeAway is trying to draw a contrast with Airbnb, which charges the guest 6% to 12% of the booking, and bills the host 3%.

Meanwhile, HomeAway’s new Professional Referral Network has a “variable fee and commission structures” averaging 20% of the booking, HomeAway says.

Under that arrangement, owners sign up with partners who will build a listing, handle its sort order on HomeAway, and manage all guest inquiries, and reservations while the vacation rental owner still carries out management of the property itself, HomeAway says.

Some 40 partner companies, including the Evolve Vacation Rental Network, TurnKey Vacation Rentals, Southern California Vacation Rentals and No Worries Vacation Rentals, have signed on to handle those duties for vacation rental owners.

There is also a full-service option in which the professional network partners handle the marketing services and reservations management, and take care of managing the property, as well.

“Our research tells us that many owners don’t subscribe to our sites are concerned about the time commitment required to rent their property,” says HomeAway CEO Brian Sharples.

Sharples says the new Professional Referral Network makes the process of renting out a vacation home easier than ever.

With the assortment of business models and professional management options that HomeAway is now offering, it hopes to convince more vacation rental owners who may be sitting on the sidelines to start renting out their properties.

After all, HomeAway estimates that there are 13.5 million second homes or vacation homes in the U.S. and Europe that currently are not part of the vacation rental market.

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Tags: airbnb, homeaway

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