Short term vacation rentals are booming, no question. As prices increase, we as vacation property owners need to remember that this is a competitive environment, and always will be. We need to provide a significantly better value for our guests than the hotel competition. Guests paying excessive fees to the booking channel definitely reduces our cost advantage and profit margin as Hosts. For example, a recent trip yielded the following results: We located a property in Braselton, Georgia. The summary total on a competitor’s channel included $180 of cleaning and guest fees on a $540 two night booking. A comparable hotel suite was devoid of those fees and totaled considerably – as in $300 – less. Travelers are becoming more and more cognizant of costs and excessive guest fees.
Cleaning fees are another area of concern, and many listing platforms are reducing room rates to make themselves appear more attractive in meta searches by hiding costs in these two fees. Other tactics are to withhold lodging tax until the final booking screen, creating a lack of transparency and sticker shock at the final stage of booking.
It’s now standard industry practice for Property Managers to enlist numerous fees as a revenue stream to help offset rising management costs. With many legacy OTA booking channels charging upwards of 20% to hosts and travelers combined, it’s no surprise this tactic was adopted from the hotel world. A recent article in USA Today cited multiple frustration points from travelers and hosts alike with the lack of price transparency and fees that easily exceed a property’s nightly rate. Although this tactic was standard practice by the hotel world, that doesn’t make it acceptable as a best practice for vacation rentals and hosts trying their best to be transparent on all fronts.