VRBO / HomeAway acquired; 6% traveler fee coming

Coconuts · Post by **Coconuts** » Tue Nov 10, 2015 8:14 pm

VRBO / HomeAway has agreed to be acquired by Expedia for $3.6B, with the deal expected to close in Q1 of 2016. This has the potential to change a lot of things. VRBO / HomeAway's current revenues are about 3.5% of its bookings, with most of this generated via annual subscription payments by property owners. The new owners are very likely to try to up that percentage, and their announcement of the deal reinforces that concern:

""Today we're announcing business model changes, including the addition of a traveler service fee in mid-2016, which will dramatically change our ability to compete and thrive in the coming years," says Brian Sharples, chief executive officer of HomeAway. "Better monetization will allow us to accelerate revenue growth, but most importantly will provide more resources for an even better product and service experience for our owners, property managers and travelers." Mr. Sharples noted traveler service fee, which will be based on a sliding scale, will begin rolling out in Q2 of 2016 and is expected to add an average of roughly 6% to most transactions that run through its online shopping cart."

https://investors.homeaway.com/press-re ... fault.aspx

On top of the recent 2.5% hike in the VI hotel tax, that does not bode well for vacationers trying to budget for stays at what is already an expensive destination. It could be a while before the dust settles, but this acquisition sure doesn't sound like a good thing...

All the best,

Kevin

equineannie · Post by **equineannie** » Wed Nov 11, 2015 8:20 am

Acquisitions never help a consumer. What about getting contact info on the places you like and contacting directly? Or start a similar site...bet someone does that!

Coconuts · Post by **Coconuts** » Wed Nov 11, 2015 11:30 am

equineannie: "Acquisitions never help a consumer." Agreed! They want a healthy return on those big bucks, and the only obvious source is out of the hide of their customers and property owners.

As to direct contact, many villa owners support this. Our simple web page (in a banner ad on this site, as well as at http://www.cocoplum.vi) mostly serves to direct visitors to our VRBO pages, but it also includes a direct email contact (k+d@cocoplum.vi). We and many other villa owners accept bookings directly, but the current VRBO system is pretty awesome, including automation of payments and notifications, great documentation, security, customer service, and statistics, so we (and I expect most other villa owners) really prefer that guests follow that route, at least for now. That could change if they follow through on a 6% dunning.

As to someone else popping up to provide the same functionality, that may happen, but the overall effort to reach the same level of functionality that VRBO now offers would be an enormous undertaking. As property owners, we see a lot more of that than villa renters do, and it is really quite impressive. That smoothly working infrastructure and very high marketing awareness took a long time to reach its current level, and would be daunting to replicate.

All the best,

Kevin

mbw1024 · Post by **mbw1024** » Wed Nov 11, 2015 5:52 pm

So this may be an inappropriate question but...

We are looking at a VRBO property for late 2016. If we were to book before the 6% were to go in to effect, would we avoid that?
This is a non STJ vacation.

Coconuts · Post by **Coconuts** » Wed Nov 11, 2015 6:55 pm

MB: Yes, it is almost inconceivable that they would try and tack their "traveler service fee" onto an existing reservation, with an established payment schedule.

All the best,

Kevin

mbw1024 · Post by **mbw1024** » Wed Nov 11, 2015 7:18 pm

Hmmmm....this may make me spring in to action sooner than I had planned.

loria · Post by **loria** » Wed Nov 11, 2015 7:19 pm

Been worried about this since i heard about it... ugh.

usvi-on-line