HomeAway to Home Owners: It’s Online Booking or Nothing at All

HomeAway laid down the law to vacation rental owners in the United States: When they renew their subscriptions, their properties must be online bookable.

Some of HomeAway’s foreign-based sites, such as Stayz in Australia, already require properties to be online bookable, and HomeAway is considering, but isn’t yet mandating, that all properties outside the United States likewise be online bookable instead of enabling offline bookings involving guests and hosts.

HomeAway’s decision to move toward online booking makes its model more similar than it was previously to rival Booking.com’s way of doing business — but there still is a big difference. Booking.com’s more than 625,000 vacation rentals are all online bookable with an immediate confirmation, while hosts using HomeAway’s sites, including VRBO in the United States, Arbitel in France, and FeWo-direkt in Germany, have the option of making their online bookable listings instant bookings or with a window of up to 24 hours to vet the guests and answer questions.

Of the two million places to stay on HomeAway sites, about half, or one million, are currently online and instantly bookable with immediate confirmations, says spokesperson Jordan Hoefar.

When Expedia acquired HomeAway in 2015, there was the question of whether the parent company would pressure HomeAway to adopt instant bookings like Booking.com. HomeAway instead has pushed for online bookings but hasn’t insisted on instant bookings.

“On the online booking requirement, the bigger surprise is that it took so long,” says Andrew McConnell, CEO of Rented.com, which pairs hosts and property managers. “This is something they have been signaling for awhile with most of the data/survey results they share showing travelers vastly prefer online booking to having to go through a maze of phone calls and unresponsive emails.”

All things being equal, having an online bookable listing on HomeAway sites will push the listing higher in search results, although there still are subscribers who pay for and get premium placement even though their properties still get booked offline.

While many travelers prefer online booking, a substantial segment of owners don’t — especially if it means having to instantly confirm reservations without any kind of review period.

Brad Schmidt, the owner of 12-property Mountain Home Lodge in Leavenworth, Washington, doesn’t use HomeAway for distribution and says he’s pushing colleagues in the area “to get rid of the Booking.com’s and Expedia’s.”

“The town can carry itself,” Schmidt says. “We don’t need them.”

Schmidt says he wants to develop a rapport with guests before he accepts a reservation. “If we use Booking.com, then inevitably four people will show up when the booking was for two people.”

Vacation rental news site VRM Intel reported on HomeAway’s new online booking mandate for U.S. owners renewing their subscriptions. Owners and property managers who use the pay per booking model, instead of paying an annual subscription, were already required to have their listings be online bookable.

The VRM Intel report also uncovered the fact that HomeAway is raising its service fee for guests, much to the chagrin of many hosts, to “in some cases, over 12 percent.” Owners argue HomeAway’s relatively high fees for guests drive away business.

When Expedia’s HomeAway introduced a traveler fee in 2016 it was said to range from 4 percent to 9 percent but averaging around 6 percent. Hoefar of HomeAway said this week the service fee is now 5 percent to 12 percent “but can be above or below, based on the reservation.”

We did four random checks in the United States and found fees of 6 percent for an Aspen, Colorado vacation rental; 6.18 percent in Manhattan; 6.23 percent in Phoenix, Arizona, and 10.2 percent in Orlando.

HomeAway is apparently using some of the increased fee proceeds to bankroll marketing.

“We are constantly testing how we operate to ensure we deliver the most bookings and best value to owners and property managers as possible — this means our prices are dynamic and this should not be viewed as a fixed increase,” Hoefar says. “By optimizing the service fee, we can more aggressively invest in our ability to reach travelers and send them to HomeAway sites to discover the perfect place to stay from our more than two million online bookable rentals.”

Looking at HomeAway’s online booking push and fee hikes, McConnell of Rented thinks the fee increases “seem the riskier of the two moves.”

Says McConnell: “While online booking just prioritizes one customer (the guest) over the other (the owner/manager who prefers doing everything manually), the other [fee increase] is taking money out of the pocket of both customers, and clearly is making them really mad. Will they or can they go elsewhere? Hotels have had a hard time freeing themselves from OTAs, so it is unclear if a far more fragmented vacation rental industry can do it, but when people are mad, they are willing to try almost anything.”