[Editors Note: This blog post was updated on 1/27 to address the comments below the post. What follows is the original post, plus an annotation at the end which includes the feedback on individual comments. Thanks!]
History of Quotable Rates
“What are quotable rates?” On each listing, owners and managers set the rental price on their properties; and those rates are published onto the property’s listing. The listing, along with its rates are presented in search results if a traveler requests an instant quote and enters travel dates when searching.
Last year we rolled out the first version of quotable rates, enabling owners and managers using HomeAway websites (including VRBO) around the world to present a quote to travelers when they entered dates for a stay.
As of August, more than 50,000 listings have incorporated quotable rates. However, the process didn’t work for everyone, so we allowed owners and managers to opt out. Since the initial launch, our team has held thousands of conversations with owners and managers about what they want from a quotable rates application and in response to those talks, we spent the first part of this year working on improvements to our rates application. In August of 2013, we started rolling out a new application, and as of today, more than 150,000 listings employ quotable rates. Our approach was measured: we monitored feedback from our owners and managers and tracked the inquiry performance of listings with quotable rates.
As we previously communicated to you, we've taken the final step in making quotable rates the default by removing the ability to switch back to older rates applications.
Therefore, I suggest you budget a couple of hours of time to make the transition to the new rates application, gauge how other properties in the area are priced and consider your competitive pricing strategy.
We have some great resources, including an FAQ, and suggestions on how to make the transition here: http://help.homeaway.com/articles/en_US/Article/Quotable-rates-FAQs?&. And our customer support teams are ready to help educate you on the core concepts of quotable rates.
Why Quotable Rates Are Important For You:
Listings that use the quotable rates application get more inquiries and bookings than listings that do not use quotable rates. Here’s why:
- Adoption of the application improves sort position; a vital factor for how many times your property is viewed in search results.
- Quotable rates enable our sites to display pricing in search results, enabling travelers to filter and sort by price to easily find properties in their desired price range.
- Travelers can also enter dates into search and view prices, which is key because travelers who enter dates are up to four times as likely to inquire on your property than travelers who don’t enter dates.
- The new rates application enables our systems to also display a price in the search results of our global network of sites (such as HomeAway.com). This means that travelers on other sites get the “best view” of your listing in our search results. Before, our sites couldn’t even quote VRBO listings with unstructured text-based rates (see the image below).
As you consider setting your rates, keep in mind that the bulk of travelers are not familiar with vacation rentals. Our research shows travelers tend to find complex rate structures and discount plans overwhelming. They require fast and easy price comparisons and become frustrated when they feel price there are hidden fees and opaque policies.
Addressing Your Concerns:
Some of our customers have voiced concerns about quotable rates. Let me attempt to address those concerns below:
“Quotable rates require online booking and I will not be able to control who books my property”
Quotable rates does not require you to adopt “Book it Now.” You can be an owner or manager who works exclusively with inquiries and still use quotable rates. When owners first hear about "Book it Now," some believe that it means that they must accept bookings without ever talking to the traveler and without any control over who gets to stay.
As vacation rental owners ourselves, we realize that interaction between owner and traveler is an important part of the vacation rental experience. Every vacation rental is different, and managers and owners want control over who stays in their property. Plus the personal dimension of vacation rental travel is what sets our industry apart.
“Quotable rates means HomeAway is preparing to force me into a commission model.”
We recently introduced a commission model (AKA pay-per-booking) but it’s up to you to choose which model is best for you. HomeAway CEO Brian Sharples has been clear about the HomeAway strategy: subscriptions are core to HomeAway’s business model.
“Quotable rates means that HomeAway will be giving inaccurate price quotes.”
The rates you quote must be reflective of what you intend to charge. That’s why the rates application includes concepts like seasonal rates, event rates, damage deposits, taxes, fees and rate breaks. We include pricing per person and increased rates for weekend nights (and for however you define weekends).
However, in talking to our customers we learned we cannot solve for every case. It would make the rate application unusable and overly complex. So while we kept it simple and you can note special cases via the notes field – just as you always have on HomeAway sites. For example, if you have a higher security deposit for larger groups, or a rate break for stays of 11 days or more, or give an free day for stays of 6 nights, or charge a different rate for children than adults, put it in the notes.
You can still talk to your customers before they book with you. You can find out if you need to discount to close the sale, or if you need to charge an extra fee because they are bringing a large dog. As in the past, you are in control.
“Quotable rates requires a lot of work to set up.”
Depending on the complexity of your rates and the seasonality of your market, setting rates can take some time. However, once you have set up your quotable rates, the quote tool in Reservation Manager can generate quotes for travelers and attach it to your inquiry response. You do not have to adopt payments or "Book it Now" to use the quote tool.
It takes time and effort to adapt to new systems. But because the listings that have adopted rates have seen increases in inquiries and bookings, we believe it’s worth it to you. And our support team is standing by 24/7 to help you through the transition.
We know that bringing travelers to your vacation rental is the core value we deliver to you. But as the vacation rental industry grows and expands, we can’t stand still: we have to ensure our marketplace is the best to bring you those customers.
As always, your feedback, and comments are welcome.
HomeAway Chief Product Officer
>>>>>> Updated content from 1/27/2014 to address feedback from comments below:
Thanks to everyone for taking the time to comment on this blog post
We appreciate all of the comments and feedback: there are many good suggestions and ideas here. I want to take a few moments to a) let you know what our next steps are with regards to the rate application; b) address some of the comments here; and c) request that you direct feature requests and comments to this thread.
We are definitely listening to you, and for those of you feeling frustration, we are working on your behalf to advance our rates application to better meet your needs. However, it’s important to note that there are many owners who have successfully adopted quotable rates. As of today, we have over 230,000 listings with quotable rates across all HomeAway sites and we are adding several thousand each week. In January alone we’ve added another 34K listings to quotable rates. Source: HomeAway internal reports.
Special cases and exceptions
There are still owners who have special requirements. For those owners, we suggest you use the notes and description fields to communicate your discounts, rate breaks, or special offers that are not currently supported by quotable rates. While this workaround of placing a comment in your notes or listing description for special cases is imperfect, it does allow us to solve for a wide range of variability in pricing models, pricing strategies, and special cases.
Pricing is important
We know that pricing your property is a critical factor in your vacation rental success and that there are as many approaches to using pricing to distinguish your property from your competition as there are owners. While we believe we solved for the majority of approaches to pricing with seasonal and event rates, flexible weekend definition, per person pricing, weekend, weekly and monthly price breaks, customizable fees and discounts that can be marked taxable or non taxable, changeover days, payment terms, calculated taxes and other features, there are some owners who must use the notes field to explicate their pricing or promotional strategy.
You can see from this google query (site:vrbo.com "quotable rates" -inurl:help) some of the strategies users are employing to communicate pricing offers outside of quotable rates. As of 1/27, Google counts ~100 listings on VRBO which include the phrase “quotable rates” in their notes or description, and most of these listings are accommodating for some special edge case. However, with nearly 117,000 listings on VRBO with quotable rates today, this is less than .1% of owners. While a significant majority of our customers are making quotable rates work for them without having to note exceptions, even this relatively small number is worthy of our attention and focus. This is not meant to be an exact count, but it does give you a sense of the number of owners who are using this workaround.
Test your rates, please!
As a side note, if you do move to quotable rates, we encourage you to take a very active role in determining if the rate quote engine is pricing your property the way you want. Please take advantage of the “test rates” function so that you can see how the system is generating quotes for you. One of the reasons quotable rates triggers strong reactions from owners is because pricing is so important. So take the time to test your rates by entering dates and seeing what the system is quoting for you.
We measure traveler behavior
It’s also very important to realize that we are looking at traveler behavior across millions of site visits and hundreds of thousands of listings, and as a matter of course, we A/B test our features to determine which implementation drives more inquiry and booking behavior. We are passionately committed to doing the absolute best job we can for you, and we use data to measure and optimize our sites to maximize your return. We are your partners, and we work very hard for you.
As we’ve studied quotable rates, we continue to see that properties with quotable rates are generating upwards of 20% more inquiries than those without because of a combination factors including sort order, listing quality, and high intent travelers sorting and filtering by price. Source: HomeAway internal reports, listings in the classic tier only on all HomeAway, inc sites.
Given that we implemented quotable rates primarily at the request of travelers who were frustrated by the difficulty of sorting and filtering by price, as well as the inefficiency and opacity of vacation rental pricing, we are encouraged by these results. But we also recognize that for those of you with particular rates concerns, learning that your competition is generating more inquiries because they have successfully adopted quotable rates may not be particularly welcome news.
But here’s a ray of light for you, as some new capabilities are already under development – and we’ve prioritized the ones we’ve heard about most frequently from our community.
Here’s the list of features currently under development for release in Q1:
- Updating calculation for weekly and monthly rates
- Reducing the steps to save a rate plan by removing the requirement to “test rates” before saving
- Adding 60 and 90 nights as minimum stay options for longer term rentals
- Adding children to count as part of per person rate plans (a common request on this thread)
- Aligning the max guest count for per person rate plans with your maximum occupancy for your listing
As we look ahead, we’re also planning the following features, though these will likely take longer than Q1 to implement:
- Additional tools to create price breaks based on length of stay
- Additional fees that a traveler can opt into (such as pool heating fees, etc)
- Fees based on length of stay (eg, a $5 per night fee for internet)
Specific feedback for commenters
With that, I’d like to move to some of the requests on this thread. If you have additional requests about rates, please add them on the main rates thread here.
@eastcoaster – I am glad that I was able to get your old rate cards to you so that you could quickly create your rates in our new quotable rates application. Congrats on getting your listings on Quotable Rates.
@bygeorge – please note that we allow up to 52 separate seasonal and up to 12 event rates. The average quotable rate card has 8 seasons or event rates, so your requirement for four seasons should be able to be met with quotable rates. You can have different rates, minimum stays, and per additional guest fees by season. That way, you can charge a different additional guest fee for high, shoulder, and low seasons. If you need help setting this up, private message me and I’ll get you in touch with someone to help you.
@ann12345 Every member of C-team owns and manages their own property, and a few of us manage multiple properties. It’s very clear to us that there is no “one size fits all” when it comes to vacation rentals, so we do our best to accommodate the variety of property types, sizes, seasons, approaches to renting, and owners. It is important to realize that travelers do ask us for the ability to sort and filter listings by price. We do recognize that no two properties are the same, the cost of a vacation rental stay is a critical variable in making a decision on which property to stay in.
@marshall we send newsletters out to all owners, unless that owner has unsubscribed from our email communications. If you want to keep up-to-date on changes and developments in our product, I might suggest you visit the “product updates” group. From there you can subscribe to that group and get notified whenever anything is posted there OR you can direct your email client or RSS reader to get regular updates.
@judis You wrote “You guys are trying to make this a 'cheap tickets' or hotels.com type site”. I am not sure exactly what you mean by this. However, we are responding to traveler desires to be able to efficiently and quickly find the right property for their trip, and a big part of that is knowing the cost of a stay.
@bwine You wrote “We should be able to opt out and respond with our own quotes”. There is nothing stopping you from responding with your own quotes. However, we are committed to the course of moving to quotable rates. You might address your concern that smaller parties do not know they can rent only a portion of your property by communicating this in the description or headline.
@ susaninrehoboth You requested “space for notes under each section of quotable rates”. Is your request for more notes in the rates table or in the detailed quote itself? We did test longer text in the detailed quote (the “popup window which shows the line items for a quote”) and it reduced conversion. We believe this is because there is a limit to how much text travelers are willing to read. Private message me if you want to continue the conversation.
@ margaret you wrote “at 30 days the rate quote is grossly inflated. I have been told this is the way it has been programed to calculate.” Long stay rates are tricky. The way that it works today is that if if you set a monthly rate (of say $6000) AND the traveler is requesting a stay of 30 days or more, the rates engine divides the monthly rate by 30 to create a nightly rate of $200, and then multiplies by the number of nights the traveler is requesting, so long as it is greater than or equal to 30 nights. This works well for 30 day months and 31 day months (January, March, May, July, August, October, and December) For the longer months, if you choose the nightly rate you want for a 30 day stay (say the $200 per night in the example of a monthly rate of $6000) the quotable rates engine will calculate the right price for a 31 day stay, that is 31 * $200, which is the correct price. However, this does not work for February. As a workaround, you might consider create a seasonal rate for January 31 – Feb 28, set a 28 day minimum stay (if you only want to rent months) and set the exact price you want for a 28 day stay.
As a side note, the quotable rates engine calculate a stay that is longer than a week and shorter than a month by multiplying the number of nights * the average nightly rate for your week rate for that season. For example, if you enter a weekly rate of $1400/week, when someone asks for a 22 night stay, the rate engine will calculate as follows: the average nightly rate for a week is $1400 divided by 7 nights = $200 a night. For a 22 night stay, this would equal $200 * 22 = $4400. For the sake of history, Quotable Rates version 1 allowed per night pricing to be set with discounts for ANY length of stay. However, the vast majority of owners created rate breaks at 1 week and 30 days, so we adopted that in the name of simplicity.
@gdebba You mentioned that you have to have a weekly minimum (from an HOA?) but often rent nightly rentals. We have heard of other properties that have to advertise a weekly minimum but want to sell nightly. I might suggest you prominently feature a message (in your headline, description, and “more info” about rates) that travelers should contact you for shorter stays.
Wrapping it all up, resources, and a webinar on rates
In conclusion, I want to thank everyone again for their comments and feedback. Pricing is critical to your success, and rates are just a mechanism to help you present your best price to a prospective traveler. We’re trying hard to strike a balance between giving you the flexibility you need, giving travelers what the efficiency of a price quote, and not making the rates application too complex for the vast majority of users. And we are committed to working hard for you to improve quotable rates.
In the meantime, we have some great resources that can explain the basics of quotable rates here. If there is specific information that isn't explained or you would like to know about, let us know.
We will be holding a webinar to go over that strategy and tactics of quotable rates on Friday 1/31. If you want to join, the info is below:
Friday, January 31, 2014
You can sign up here:
As a final note, I’d like to direct everyone to this thread about “feature requests” here. That’s where you should direct your feature requests for quotable rates as we’re using that as a tracking thread. We will no longer be accepting comments on this thread.