If you are a vacation home owner (or vacationer), you NEED to read this.


Are you an owner of a home that you rent out as a vacation rental?

Are you a vacationer who has stayed in or may consider renting a vacation rental home?

If so… you won’t believe what’s happening in the vacation rental industry!  It’s crazy.

Traditionally, vacation rentals have been around for quite a few decades as a cottage industry (excuse the pun).  It used to be done informally — parents pack up the kids, stuff the station wagon and drive for hours to a mildewy-smelling, knotty pine cabin with a smelly fridge and questionable mattresses.  Arrangements were usually made either with the owners directly (word of mouth) or from a real estate agency.

About 15 or so years ago, the internet was upon us full force and everything changed. Online listing sites started popping up everywhere.  Some were local, some were national and even international. 

Here’s a run down of some of the larger, most popular sites that are currently out there… see if you can keep them straight…

HomeAway is probably the biggest and best known.  Owners can pay to list their homes or list for ‘free’ (and it gets complicated…more on that later).  In 2006, HomeAway acquired VRBO (Vacation Rentals By Owner) and in 2007, they acquired VacationRentals.com. Even though they are all now one company, all three of them operate as three separate websites.  An owner can list on just one of the websites or list on all three through a bundled rate.   And just to make things even more complicated, HomeAway was just acquired by Expedia, the travel giant, this past October.  The biggest change announced so far is for vacationers… coming in sometime in 2016…get ready for it vacationers… HomeAway/VRBO will be adding their own booking fees to every reservation, making your vacation a little more expensive.

Flipkey is another platform where owners can either choose to pay for a subscription or pay per booking.  It has different rules than HomeAway — one of the biggest is that the owner doesn’t get paid until after the guest has checked in and 24 hours have passed.  For locations that book up to a year in advance, an owner can be floating a pretty hefty, interest-free loan to the company.  Flip key is owned by TripAdvisor.  Also, the traveler and owner cannot correspond directly until the booking is made.  This can make it very difficult.. as an owner, sometimes I like to answer questions by referring to other websites (ie. tourist, local business or restaurant) but if I do, the website address is XXX’ed out.

AirBnB is the scrappy newcomer to the vacation rental business.  It was founded in 2008 and originally was a platform to temporarily rent out rooms in one’s home while the owner still occupied it, but has now grown to include entire houses and apartments (and automobiles, tents, and tree houses).  If you hear the term, sharing economy, there is a pretty good bet that it has something to do with the companies, AirBnB, Lyft, or Uber.  

AirBnB is completely free for owners to list their homes.  If a guest books a property, the owner is charged a 3% fee and the guest charged a booking fee (generally 10-12%).  Like Flipkey, the owner and guest are not permitted to take their conversations off of the site, so correspondence is limited to emails back and forth on the AirBnB website (also with websites and emails XXX’ed out).  Owners can set their parameters for renting within AirBnB’s framework (ie. they need to choose a cancellation policy from a list of choices provided instead of posting their own cancellation policy).  In most areas of the country, if an owner requires a signed rental agreement (and most owners do require this) or lodging tax, or another miscellaneous fee, they must get this done after the booking has been confirmed.   AirBnB does offer a layer of protection for the hosts (owners) – coverage of up to $1,000,000 in damages in the event that guests trash the property.  However, anecdotal reports have said that it can be a fight to get the reimbursement or security deposit if disputed.

Now here’s the dilemma… with all of the differences between the sites, which one(s) do you choose?  Do some have more proven results than others?  Which will work for the owner’s bottom line, while keeping guests happy, as well? 

Part of the appeal of HomeAway and it’s sister sites, VRBO and Vacationrentals.com was that they were a listing site.  Paid advertising. Period.  The owner paid money to advertise their vacation rental on a website.  You could choose how much you wanted to spend on your advertising.  There are several different confusing tiers…  you can just purchase a basic listing or you can pay a premium for a bronze, gold or platinum listing.  Obviously, the platinum listing would get you to the top of the list.  Perhaps your town only has ten vacation rentals.  Then an owner would generally have no need to pay the extra money for platinum as their property would always be ‘in the top ten’.  But suppose your town or city has 500 listings?  It might be worth the $1200+ per year investment to keep you on top.  Besides the different listing tiers, the owner can also pay to list on just one site (ie, VRBO or HomeAway) or pay a premium to list on all of the sites in the HomeAway family … either in the US or Globally.  Advertising on the top tier with a ‘global bundle’ will set a homeowner back over $1800/year.  But, for a listing to show up somewhere in the top 10% or so, an owner may determine that it’s worth it.

But what happens when there are, say… twenty platinum listings?  HomeAway had it’s own metric to determine the sort order (note: past tense:  HAD it’s own metric).  Property owners who are on the top of the list must fulfill certain criteria…  they must respond to inquires promptly.  Waiting days before responding will ding you.  Also, the more (good) reviews that you have on your listing will move you up higher. Having your calendar up to date will put you higher.  Finally, if you accept payment through the HomeAway system, it works as a plus for ranking.

So… are you following this so far? 

You own a vacation home. 

You want to rent it out. 

In order to get the most exposure on the top listing site, you need to first cough up your $1200+ per year.  Then you need to respond to all inquiries as soon as possible.  You need to accept credit cards through the payment system (paying out another percentage), and you need to contact every past guest and convince them to write a good review.  Got it?  Not so fast…

About a month or two ago (suspiciously the same time Expedia announced their purchase), HomeAway changed all of the rules.  No longer is the sort order only about who pays the most, but now it’s about their “best match” agorithm.  Their IT guys have come up with some formula of who is more likely to book depending on how someone searching enters their dates of travel.  (Are you confused?  I am).  If a potential guest starts a search for a property with no vacation dates entered, they will no longer necessarily see platinum listings topping the list.  Why?  Because most platinum listings have less vacancies and this new “best match” sort throws properties that have more empty weeks up to the top of the pack.  In my opinion, this is to appease that basic listing owner – the one who doesn’t get many bookings – from leaving HomeAway and listing on one of the competitor sites.  If these owners start seeing results (from being on the top of the list), they will be more satisfied with their results and more likely to renew.

But where does that leave the platinum listing owners?  The owners that have shelled out $1200 – $1800 or more per year to ADVERTISE on the website?  Well, at least for now, they very well may be behind properties who have paid less than half as much. They are behind listings who wait days to respond to inquiries.  Behind listings with no reviews or…eek…bad reviews. (Can we say ‘class action lawsuit?)  What is so frustrating to the platinum listers is that usually, they are the owners that put lots of effort and work into their rental properties and it shows with more bookings and more reviews.  They are willing to invest time and money into their vacation rental business (and the bottom line is, for many of us, it IS a business).

So what is a vacation rental home owner to do?  You can pay more money, but there is no longer any guarantee of getting to the top. 

1 – You can list with one of the alternative sites…  Flipkey or AirBnB, or maybe a smaller, regional site.  I do speak from experience, though–  It is very time consuming to keep up with a plethora of listing sites.  If you need to tweak your rates, add new pictures, change the ad copy,  you need to go to every site to make the change.  It takes good organization skills and lots of time.

2 – Keep up with everything that (supposedly) keeps you at the tip-top of the HomeAway listing site.  Reply to inquiries in nano-seconds – even if it means pulling off the highway and responding instantly.  Use the site’s payment feature.  Keep your calendar up to date. Hound your guests for good reviews.

3 – Go back to the way it was before everyone tried to rent out their space themselves…hire a booking agent or property management service to manage everything.  Typically, a good service will be up to date on all of the new criteria (as well as local laws and regulations) and websites and will already have brainstormed the best way to showcase properties.  Their job is to answer inquiries within minutes and to always keep your property updated and front and center.  Some booking companies may even have account managers that help to get the listings higher on the list (and their own website to showcase your property).  Yes, it costs money for this, but it might just be worth it to take the hassle out, and keep your vacation home, well, a vacation.

Whew.  After wading through all of this, I really do need a vacation.

Maria Lamb

About Maria Lamb

Maria is the owner of Wicked Awesome Maine Vacation Rentals based in beautiful Washington County, Maine.