Since being acquired by Expedia, there have been quite a few changes at HomeAway and we expect to continue to see changes to their model. While we understand the financial motivations behind these changes, they are quite disruptive to our business and industry. We've heard from many self-managing owners and property managers alike regarding their frustrations with these changes and want to do our part to clarify what has occurred as well as provide methods for working within the framework. These challenges ultimately boil down to HomeAway's desire to strengthen their brand among guests and further disguise the actual service providers. While these changes are meant to have a positive impact on HomeAway's bottom line, they come at a cost to home owners and property managers who traditionally look to build a relationship with their guests in order to provide the highest quality service possible. Read more about our Best Rate Guarantee!
The Increase in Traveler Fees:
In an effort to increase revenues, HomeAway introduced traveler fees in early 2016. This was a direct response to Airbnb's service fees and an effort by HomeAway to be able to spend more on their marketing efforts. These fees were rolled out despite heavy opposition from owners, property managers, and customers alike. After a year of operating with traveler fees, in April of 2017, HomeAway increased the rate to 5-12% as compared to the 4-9% which was initially rolled out. Guests fought back against and sought booking methods that would allow them to avoid these superfluous fees. HomeAway's response to these pushes from guests was to rally against property managers and owners who they believe were circumventing the system. These fears from HomeAway led to their next change...
The Push Towards Online Bookings:
Since online bookings made through HomeAway and their subsidiaries are the only reservations subject to traveler fees, HomeAway has moved fully to an online booking only model. It was announced in early 2017 that they would no longer accept, support, or renew listings that did not allow online bookings. It was a further attempt to control all business through what was traditionally a listing site and increase HomeAway revenues. While many property managers have been online bookable since it was introduced in 2014, it is often more difficult for owners who manage their own properties to conform to the requirements to support such an endeavor. Shop online now for ALL vacation rental on the Island Realty website!
The Anonymization of Correspondence:
One of HomeAway's most recent changes, we are told that beginning in August 2017, owners/managers will no longer receive the contact information from guests submitting inquiries. HomeAway has announced that they will not only anonymize email addresses and phone numbers, but they will be running all correspondence through filters that will redact any phone numbers, email addresses, logos, and non-HomeAway URLs provided in correspondence. This serves as one of the biggest threats to service we have seen thus far. By redacting this information, HomeAway seeks to further remove service providers from the guests and censor conversations that are had in hopes of increasing earnings through the aforementioned service fees.
The Reduction of Individual Brands:
Each of these actions serve the ultimate goal of strengthening the relationship between customers and HomeAway. Unfortunately, this comes at a cost to property owners and property managers who interact directly and provide service to the guest. By removing the property manager and/or owner brand from the service, inquiry, and more, the guest feels as though they will be renting directly from HomeAway which is not the case.
So, what else is coming?
From conversations with fellow property managers and industry insiders, it is clear that no one sees this as the end of HomeAway's efforts to undermine their service providers. While it isn't clear exactly what will be next, it is clear that there is no end in sight.
How can you operate in this model and what should you do from here?
Diversify. Gone are the days when a property owner or manager can rely on a single booking source. If you currently get a significant portion of your rental income from HomeAway (or another listing site) it is time to distribute elsewhere and/or invest in building your own website or brand. The experience with HomeAway has made it clear that relying on a third party to sustain your business is a risky endeavor. As HomeAway changes, those deeply embedded are at risk of seeing a real threat to their business. If you are able to view HomeAway as an additional revenue source, instead of the primary, the changes are less threatening.
Plan for the future. HomeAway, and their competitors, will continue to morph and change as the market shifts. Similar things occurred in the hotel industry, and that situation made it clear that the changes will not stop here. Evaluate your business model and your market. Find your strengths and opportunities and strategize accordingly. The only thing certain moving forward is that further change will come and as with the situation now, you will be forced to adapt or leave.
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