VRBO - Important changes coming to you

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AngloDutch
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VRBO - Important changes coming to you

Post by AngloDutch »

Have just received this very long email from VRBO this evening:


VRBO and our owners and property managers have enabled millions of vacations in the last 10 years. Together, we have transformed what was once an alternative way to travel to a preferred way to stay. You put your trust in us—and we remain grateful and committed as ever to delivering a strong return on your investment.

The vacation rental space is rapidly evolving, and so are traveler, owner, and property manager expectations. Today, we are announcing some changes in an effort to better meet and exceed these expectations—resulting in the best experience possible with VRBO. Our goal is to provide travelers with a simple online booking experience and a sense of security that their vacation is protected, while still providing you with the levels of control and flexibility in listing options that you deserve.


Watch the video from our CEO, Brian Sharples, as he explains our marketplace evolution.


Simplifying to bring you more value


Moving to one annual subscription

Historically, you’ve had the option to pay for search placement based on your subscription level. However, starting July 11, 2016, we will stop selling multi-level subscriptions (Platinum, Gold, Silver, Bronze, and Classic) and will move to one annual subscription. The move to one annual subscription will occur gradually over the next 12 months. As we make this transition, your existing subscription level will continue to work as it does today.

The new annual subscription will be offered at $349 for properties with online booking and $499 for properties without it. The new flat price is similar to the price of today’s Classic subscription but will now include regional and global exposure on 25 of our global sites at no extra cost. In the past, customers have paid upwards of $1,500 for a Platinum subscription (with global bundles) to have top placement in search results. Now, with the annual subscription, you pay a flat rate of $349 and still have the opportunity to be at the top of search results. That’s a price reduction of more than $1,000.

As we move to one annual subscription, your position in search results will be based on our best match system, which includes many factors that you control such as response time to requests and calendar accuracy. However, the most important factor in best match is the number of online bookings processed through our site. If you don’t have online booking, it’s important that you enable it. It will make your listing more successful, and you’ll still be in control of communicating with travelers, accepting or declining booking requests, and payment methods. Learn more

We know that where your listing ranks in search results is important to bookings. As we phase out our multi-level subscriptions, and move to best match, we will also be introducing a new, flexible system that helps elevate your search position for short-term boosts. We expect to start testing this new system later this year and would greatly appreciate your feedback. Look for an invitation later this year to participate in our beta test!

We understand that this is a lot of change and we want to help make the transition as easy as possible. For this reason, we are offering you the option to remain in the existing subscription model at any level for one additional year. To take advantage of this, you must renew and purchase before July 11, 2016. After this date, you will only have the option to renew into the one new annual subscription. Learn more about early renewal


New travelers for you, better protections for them


We want to continue to be the best marketplace for vacation rentals, which for you means a booked calendar and for travelers means a great experience. These enhancements require investments. Instead of you funding 100% of these initiatives, we’re balancing the cost between owners, property managers, and travelers.


The traveler service fee

As you know, we recently implemented a new service fee that is charged to travelers when they book a rental property through our site. This fee is approximately 6% of the amount paid by the traveler and is still lower than most of our competitors. Plus, you spoke and we listened—we’re dropping the cap for this service fee by 20% effective June 1.

The funds from this fee are going toward a few critical improvements and enhancements:


A new Book with Confidence Guarantee™

For added security and more protection, we’ve introduced this new guarantee that protects the full amount of a traveler’s rental against things like misrepresented or double-booked properties and fraud. Additionally, VRBO has added 24/7 customer service for travelers should anything go wrong.


More investment to bring you quality travelers

We have increased our investment in brand awareness and marketing to keep our sites top of mind, to drive travelers and bookings to you.


New customers via Expedia, Inc. travel sites

We recently launched a “Vacation Rentals” tab on the Expedia.com homepage, one of the world’s leading full service online travel companies. This is currently being tested with the goal of expanding the number of travelers that view HomeAway’s online bookable listings via Expedia.com. Learn more


Greater control over your performance and guest feedback

We’re creating tools and features to provide better insight into your business, as well as equal feedback on the experience with guests.


Improved analytics

You now have access to improved data to help you better understand your performance over time and compared with similar listings in your area. Learn more


New ability to rate your travelers

We’ve recently launched a new reviews platform that allows you to rate your guests, just as they are able to rate your property. Learn more


Enhance your search position


Look out for an email invitation to join our beta program as we develop and test new features that will help enhance your search position.

We’ve covered quite a bit in this email, but please know that we’re dedicated to helping you through this transition. Additional details will be provided in the coming weeks via emails, videos, and question and answer sessions. We encourage you to also visit our website for details on all of these initiatives.

Thank you for your commitment and loyalty. You are very important to us, and we’re confident the changes we’re making will benefit your business well into the future.
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Essar
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Post by Essar »

Interesting; I'll have to have a deeper delve and a bit of a think before commenting....
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AngloDutch
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Post by AngloDutch »

As we move to one annual subscription, your position in search results will be based on our best match system.....the most important factor in best match is the number of online bookings processed through our site. If you don’t have online booking, it’s important that you enable it.
HA has already managed to upset alot of owners with the service fee and this is not going to go down well either. Expect their community forums and FB page will be inundated with angry comments about this...
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Cymraes
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Post by Cymraes »

If the most important way to stay top of the results is to take on line bookings what does the new beta program do and will you have to pay to use it?

I can see people being forced into taking online payments and still being relegated to the bottom ( although presumably just above those who hold out against it)
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Post by Dotty »

Had a quick look on the 'say no to vrbo service fees' closed group on facebook last night - apparently there have also been massive changes to the small print of the T&Cs too and not in a good way for owners.
Essar
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Post by Essar »

Well I've been delving about a bit and it has been interesting.

There is no doubt that Expedia has put a halt to the HA aim of getting all owners "on-line bookable" by the end of 2016.

In doing so they have completely revamped the way their revenues will be generated in the next 2-years.

It is also become obvious based on the HA results for the first quarter of this year that the Traveller Service has NOT affected HA revenues at all, in fact they up 170% on the same quarter last year. HA claims to have lost over 5000 properties directly because of the Traveller Service Fee introduction of VRBO - taken in contect this a smudge on the surface when you consider VRBO has over 600,000 properties and makes up the vast majority of HA's 1.1m properties on all sites. For the 3rd year running VRBO has maintained "the most searched VR site in the world" award. They probably consider that the loss of this bothersome crowd as a good thing. We have to remember that VRBO owners in general are not the same as owners anywhere else, certainly in Europe. They tend to use one major site and operate their whole business through the dashboard, therefore, any changes to their business operation will have a major impact - less so in Europe where we owners use our own management systems (be it a spreadsheet, back of an envelope, PIMS or FreeToBook, etc) and list everywhere we can.

So, it looks like that sometime towards the end of this year HA will bring the new pricing structure to the rest of us outside of North America.

I will use $ instead of £ as we don't quite know the maths yet.
Commission model = 8% commission for owners & travellers service fee (TSF) for guests of between 6% and 10% with a maximum of about $399 (20% reduction).
Subscription model = 1 basic annual charge; lower by about $150 for those with on-line booking enabled. Ranking based upon the "best match" algorythmn with those with on-lne booking enabled ranked higher than those without it. Plus the Traveller Service Fee for guests, same as commission model. There will also be additional ways for owners to move up the rankings by buying extras to boost position.

There have been a number of extra guarantees added for travellers under the cover of the TSF.

On the face of it owners will be better off; particularly, those who are currently on the higher tiers. Owners who opt not to have on-line booking will now not be forced to join up; they will pay more for the privilege of listing, but will be down the rankings - "best match" could even force them below commission model listers in most searches.

Implementation will be fazed in as subscriptions come up for renewal; although, there is some talk of owners being able to have one more year on the old way at the next renewal after its introduction - we'll see.

It seems that the new subscription will include all 25 HA sites instead of the 17 International sites as now. This will mean the end of International, North American & UK bundle upgrades as they become irrelevant. This then begs the question - "What's the point of keeping OwnersDirect when HA.uk is now the major site for the UK?". It would be nice if OD was broken away from HA and run as a independent site, but this is not going to happen - they will probably consolidate it's properties into HA.uk and drop it completely.

Personally, I will be better off as I have one bronze & one silver listing - these should be cheaper. I have on-line booking & payments enabled already, so that makes no difference.

I expect that HolidayRentPayments will up the 1.4% currently charged to match the VRBO 2.2% rate now in use in the USA.

City apartment properties on VRBO are being hosted on Expedia under a "Vacation Rentals" tab; no doubt a direct push against AB and Priceline (BC), who do well in this sector. They are also being rolled out to the other Expedia sites; Hotels.com, Travelocity & Orbitz.

Overall, quite a dynamic change in the way they operate - even though the 5000 properties let go, their owners and many thousands more have had a major bearing on making HA adopt this new charging methodology - they continue to deny that this has anything to do with it (yeah right!).

I like the simplification of the pricing; it does nothing for me in terms of the Traveller Service Fee, I believe this is just plain wrong. However, the world and his dog now apply this in it's many booking fee guises, so it's here to stay and travellers do not seem to have been frightened off by it - certainly not on VRBO anyway.

Remember that you should never be frightened by the implications of change; it's the changes required to implement the changes that are a pain in the neck, the time it takes and the ramifications on the bottom line should not be forgotten. Change for the sake of change is worthless, change for the good is lovely, change for the bad can be devastating, but in general change can be managed, you just need to step back, think it through over a cold beer and then adapt the way you work to work around the workings of the change. QED.
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tavi
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Post by tavi »

Thanks essar,
As always - interesting to have your analysis - and grateful for the time you take to share it with us.

Certainly seems that Expedia's cage was rattled by the very strong resistance in North America to the changes HA were trying to make. I kind of have the feeling that it was not only the OWNERS' rants that have made them rethink a few things but that perhaps they were getting the feeling (that they will never admit to of course) that they were NOT "the most searched VR site in the world".

Interesting also to note that Expedia.com's share price went up today for the first time in 6 weeks.
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Post by Ben McNevis »

I'm not a great reader of T&Cs but, fortunately, some others are. Here is verbatim copy of one of the posts about this from the Facebook Say No to VRBO closed group:

I think that Section 24 of the new T&C is the most concerning clause. I have interpreted (as others have) to mean: if HA compensates your guest in anyway, due to owner acts (cancellation, unihabitable property, emergency relocation) HA can charge you, the owner, back for any costs it has incurred &/or paid to the guest
I don't like the liability this creates for owners for an "offering" that VRBO advertises for their 24/7 service. The new traveller fee should cover any claims! It's their program and their guarantee to travellers - not ours!
Seems to me that homeowner cancellations would be the most common situation. All other situations would have a small probability of occurrence from a reputable homeowner. My question is - besides the obvious of leaving VRBO - what other options do we have to handle this clause?
Cheers, Ben
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Post by Essar »

Ben McNevis wrote:My question is - besides the obvious of leaving VRBO - what other options do we have to handle this clause?
Having signed up to use their service you are accepting their terms and conditions - therefore, if you don't like it, don't use it!
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Post by FelicityA »

Good analysis Essar. Just one little point - the credit card rate is now 2.9% through VRP/Yapstone.
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Post by greenbarn »

Essar wrote:
Ben McNevis wrote:My question is - besides the obvious of leaving VRBO - what other options do we have to handle this clause?
Having signed up to use their service you are accepting their terms and conditions - therefore, if you don't like it, don't use it!
The concern appears to be where additional conditions have been imposed unilaterally after the sign up to use their service.
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Post by Essar »

greenbarn wrote:
Essar wrote:
Ben McNevis wrote:My question is - besides the obvious of leaving VRBO - what other options do we have to handle this clause?
Having signed up to use their service you are accepting their terms and conditions - therefore, if you don't like it, don't use it!
The concern appears to be where additional conditions have been imposed unilaterally after the sign up to use their service.
In the US there is a little known/used legislation that prevents changing T & Cs mid-term for paid services; no doubt the EU has something similar. I understand that someone has already initiated the legal process after the class action went nowehere. This legislation is supposed to stop on-line services insisting that you accept the new T & Cs before you can progress to the application even though you had free access previously.

I suspect that HA will respond by only applying the new changes when re-newing the subscription.

Many VRBO customers have already started moaning about the new set up, particularly those that will have to pay the higher subscription. They seem to think that by not using the on-line booking service that the traveller service fee will not apply; they are mistaken. They believe that they are paying the extra $150 as a substitute to the TSF.
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Post by Ben McNevis »

Essar wrote: They seem to think that by not using the on-line booking service that the traveller service fee will not apply; they are mistaken. They believe that they are paying the extra $150 as a substitute to the TSF.
That's something I've never understood: If the booking is not done online, then how can HA know that a booking has occurred and how can they collect from the guest?
Cheers, Ben
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Post by AndrewH »

greenbarn wrote:The concern appears to be where additional conditions have been imposed unilaterally after the sign up to use their service.
Exactly so, in my personal opinion. Perhaps there is also a term (I don't know, because I haven't looked) giving themselves authority to do this. I can see a courtroom barrister having a field day at HA's expense, if push ever came to shove.
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Post by paolo »

Have I misunderstood in watching the video, I thought it said every advertiser pays the 'low' fee of $349 per year just to appear on the site, and then the commission per booking on both owner and renter is in addition to that. And If you don't go with online booking, then the 'low' fee is $499.

Whereas with airbnb and booking.com, there is no annual fee to appear on the site, just commission per booking. Is that correct?
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