2016 Year in Review – Expedia ruined a good thing!

Dec 30, 2016

2016 for sure has been a confusing year to figure out and follow exactly what VRBO / Homeaway is up to. Luckily for us on LBI, the negative results of Expedia’s changes didn’t affect many of us whose summers were mostly booked early in the year. But now that we are getting ready to field inquires for summer 2017, we might not be so lucky…

Late 2015 Homeaway, and their umbrella of vacation rental websites including VRBO, were purchased by travel mega conglomerate Expedia. Expedia is the largest OTA (Online Travel Agent), with dozens of online travel sites including Hotels.com, Orbitz.com, Travelocity.com, and many others. To get “into” the booming Vacation Rental segment, it was only natural that they acquire Homeaway, the largest online marketplace for Vacation Rentals (VR’s).

The first big change came in late February, when they rolled out a new “service fee” that would be added to the rental amount we charge our guests. This fee ranges from 4% - 9% of the booking fee you charge, which could add several hundred dollars to the total a guest would pay. But to collect this service fee, they needed us to sign up for “Homeaway Payments”. Cleverly, they pitched it to owners as a way that we could now offer our guests the convenience of paying online, including using credit cards. If you accepted this new feature, your listing was now subject to having the service fees added.

Many of us, including myself, figured this out right away and were able to deactivate the Homeaway Payments, which removed the service fee from being charged to our guests. Great! Back to the way things were before, but not for long…

The next big change came a few months later. In the spring of 2016 VRBO / Homeaway announced that they were ending their “Metal Level” subscriptions packages. Starting in July 2016, renewals would all have only one subscription package to choose from. No longer can we “buy our way to the top” in the search results like we could before, by upgrading our subscription to Gold or Platinum. Instead, the new “Best Match” algorithm was launched. Under Best Match, those listings with “Book it Now” (BIN) would be given ranking preference and those who process the most online bookings, will be placed at the top of the search results, rewarding those properties who earn them the most revenue!

But here is the catch…to have BIN enabled on your listing; you also need to have Homeaway Payments activated as you need a way to collect payment instantly from a booking guest. If you activate Homeaway Payments, the service fee is automatically added to the total your guest pay. So through Best Match, they are rewarding the properties who earn them more revenue, via service fees, by placing them higher in the search results.

Next, during the summer 2016, VRBO / Homeaway started expanding the local search results for properties. In Ship Bottom, where my VR is located, there was always about 100 other “Ship Bottom” listings that I competed with. I just tried this search today, without any dates, and VRBO returned 1221 rentals! There are not 1221 VR’s in Ship Bottom!  How frustrating for a guest, who wants to stay in a specific area of LBI to be inundated with listings far, far away! I have found some from Seaside and Brigantine in a Ship Bottom search! Not to mention how many pages of listings your potential guests now need to scroll through just to find your listing? Before, all the Ship Bottom VR’s could be found on just 2 pages. Today, there are 52 pages, each consisting of 50 listings to sort through…who has time for that! This is also why most listing views are significantly down from a year ago.

Then in September, VRBO / Homeaway decided to hide the owner’s contact info…why? No more owners name, no more picture, no more phone number to call or text…why? To make guests go through the system to message us. In November, the phone numbers appeared in the listings again, but now to “call owner” you must click on a link to get the number, which they are tracking.

So, 2016 has been a year of a lot of change at VRBO / Homeaway which was the motivation for me to create this website. In addition, I think they have a lot more change in store for their subscribers in 2017. For sure, in 2017 all of the grandfathered metal level subscriptions will expire which will bury our listings unless we conform and enable BIN. But even if we activate BIN, how do we get to the top of 1221 listings? That, in my opinion, is the next trick Expedia has up its sleeve. There are rumors of commissions on bookings taken from homeowners, or auction type bidding for higher rankings. Buckle up, the bumpy ride will continue.

The GOOD NEWS is Vacation Rentals LBI has launched and is everything VRBO / Homeaway use to be! If you aren’t already a customer, sign up today and take back control of your VR listing and guest interaction! Together, we can make 2017 a great year!