Skift Take
HomeAway’s fee hike spotlights the shifting economics of the vacation rental business. Property owners are weighing how much of a cut technology companies deserve when making it easier for them to put heads in beds.
Despite some opposition, HomeAway will level a big fee hike next month for property owners who opt to make flat subscription payment instead of opting to shell out a commission when a vacation rental gets booked.
Beginning January 12, HomeAway will increase the subscription cost that U.S. property owners pay to list on its platform. The cost will rise 25 percent to $499 annually per listing.
Airbnb wasted no time and conducted a media call Monday, arguing that HomeAway's fee represents an opportunity for it to pick up some customers.
Late last week, word spread about the subscription fee increase when the company began to email property owners who are up for renewal about the new terms. VRMIntel first reported on the emails.
The cost hike comes less than a year after HomeAway last boosted its subscription and bookings fees for property owners.
There have been rumors that HomeAway would like to kill its subscription plan by next summer as it tilts toward a transaction, or pay per booking, model.
But the company said Monday it is committed to maintaining the subscription model. Bill Furlong, vice president and general manager of HomeAway, said in an interview that the company "had no intention" of dropping its subscription product.
"We are not moving to pay-per-booking to our whole market," said Furlong. Pay-per-booking listings require a commission of 8 percent each time a guest books a property.
HomeAway has said that owners who don’t rent out their properties much, such as for less than $10,000 in revenue a year, are often best with paying a percentage-based commission. But professional managers who earn much more a year may benefit from a subscription-based model.
A spokesperson added, "For owners and property managers who earn a significant amount of vacation rental revenue, the math favors the subscription model over pay-per-booking by providing greater return-on-investment. HomeAway offe
