When Vrbo Hosts Charge Junk Fees

Welcome back, it’s a brand new day to talk about junk fees — as discussed on TikTok. A viral video posted by a comedian scoffs at short-term rentals and sometimes-exorbitant “host fees.”

In his TikTok video, comedian Jesse Martin highlights how a $172 per night charge results in a total price of $972 for two nights — $108 in service fee, taxes and a $425 host fee. Airbnb was quick to confirm to The Daily Dot that the receipt displayed on Martin’s video is from Vrbo. 

Vrbo verified to Skift that that the booking in question was a Vrbo transaction. “The receipt is verified by Vrbo," a spokesperson said. "Host fees are set by the host and displayed separately to service fees when applicable."

Some of the custom fees hosts can set on Vrbo can include for air conditioning, linens, water and more.

Last week, we reported on Travelers United's decision to file a lawsuit against Hyatt regarding its "junk fee" practices. This aligns with the ongoing spotlight on travel-related fees, which gained prominence following President Joe Biden's mention of the issue in his State of the Union address in February.

The consumer group filed the lawsuit filed in Washington, D.C., a jurisdiction that mandates clear and upfront pricing. But since then Hyatt displays rates plus resort fees upfront on a traveler’s first search — the hotel chain appears to have changed its site within the past month or so.

But where do short-term rentals stand on this?

Property manager Vacasa may sometimes charge a custom hot tub fee that could be also be categorized as junk fees and excessive. 

The jury is still out on whether or not cleaning fees are “junk fees." A guest can tell exactly what they paid for a cleaning service. Sometimes they clearly are more costly than what the platform paid for the service, and some argue hosts can use cleaning fees as profit sources.

The other fee charged by property managers, depending on the size and nature of the rental, is a “property protection plan” or a “security fee” — or a damage waiver fee (think: party house damages).

“We have short-term and long-term rental companies. In both companies, our fees are vital to providing professional services and cover additional costs placed on us by local and state regulations,” Tiffany Edwards, a strategic consultant for short-term vacation rental organizations and owner of vacation rentals, told Skift earlier. “It’s very unfortunate our fees are lumped into a narrative of junk fees and corporate greed. It further demonstrates that our industry is misunderstood and there is little education regarding the processes and work associated with rentals.”

For their part, a lot of hosts and operators feel that this issue shouldn’t apply to them the same way it does to hotels or airlines because their work is more complex with skinnier profit margins. Do you agree?

Author’s note: This is a developing story, if you have any feedback, comments, perspectives to share, email Srividya Kalyanaraman at sk@skift.com

Airbnb Inks Memorandum of Understanding with South Africa

Airbnb is casting a wider net. It has now inked a memorandum of understanding (MoU) with South Africa. South African Tourism Minister Patricia de Lille signed an MoU with Airbnb last week to enhance tourism services and job creation in the country. The agreement aims to support the recovery of the tourism sector and promote inclusive tourism. Under the MoU, Airbnb would collaborate with the Ministry of Tourism in several ways, including establishing a national database for short-term rentals to provide transparency in the market, implementing the Airbnb Entrepreneurship Academy to empower historically disadvantaged individuals in the tourism industry, and create an exclusive portal for governments and tourism organizations to share data and insights. This is supposedly alignment with the government’s Economic Reconstruction and Recovery Plan and the Tourism Sector Recovery Plan adopted in March 2021.

Halifax Introduces Short-term Rental Rules

The town of Halifax in Nova Scotia, Canada has introduced new regulations for short-term rentals to address housing shortages in residential areas. The majority of short-term rentals in Halifax, particularly on platforms like Airbnb, are whole homes (1,937 out of 2,418 active rentals). As of September 1, these rentals and bedroom listings are only allowed in residential zones if they are within the owner's primary residence. Renting out the entire home is permissible when the owner is absent. Additionally, basement apartments or backyard suites must have rental periods exceeding 28 days. Short-term rentals remain allowed in commercial or mixed-use zones, where hotels are often situated.

Enforcement of the new rules remains uncertain, but the city is working on increasing its enforcement team. To enhance oversight, all short-term rental owners must register with the province, and this data will be shared with Halifax to monitor their locations within the city. By April 2024, both short and long-term renters must register with Halifax through the city's new rental registry. Currently, around 300 applications have been received, with four related to short-term rentals. While these regulations apply citywide, rural areas with more flexible zoning may continue short-term rentals. 

Los Angeles Short-Term Rental Owners Are Profitable, Also Secretive

In Los Angeles, running a short-term rental can be profitable, if secretive. Despite concerns about the impact on the housing crisis, hosts are charging higher rates and earning larger payouts. But a majority of them prefer to remain anonymous due to fears of fines or having their listings shut down. Data reveals that numerous homes are operating without the required active registration for short-term rentals, a requirement imposed by the city, The Los Angeles Times reported. 

But since 2020, host revenues have steadily risen, with average earnings reaching $17,654 in 2022, up over $4,000 from the previous year. The total earnings for L.A. hosts in 2022 amounted to $375 million. Several factors contribute to this trend, including rising daily rates for Airbnb rentals, which have increased from $152 per night in 2019 to $244 in 2023. The supply of listings has decreased substantially, with the number of Airbnb listings dropping from 16,973 in August 2019 to 7,360 currently.

Despite the regulations, the short-term rental industry continues to thrive in Los Angeles, prompting concerns about its impact on housing availability and affordability. Advocacy groups are calling for more stringent enforcement and penalties for illegal listings, while also emphasizing the contribution of short-term rentals to the housing and homelessness crisis.

AirDNA Unveils New Product Design

Short-term rental data provider AirDNA has a new update to its MarketMinder tool, which will be called AirDNA. Some of the updated features include understanding property earning potential, exploring vacation rental market trends and active listings, and studying competition.