14 Replies Latest reply: Jul 30, 2019 10:03 AM by u0999 RSS

    Service fee - Maximum?

    sward6880 Contributor

      I just answered an inquiry for a 28 day stay at one of our vacation rentals.     The service fee was $598.60,     About 11% of the rental.

      I thought the maximum was $499 ?.     The cost to the guest is frankly embarrassing. 

        • Re: Service fee - Maximum?
          bonesxxx Active Contributor

          Definitely a disincentive for the guest.  Let us know if they bite.

           

          From what I am seeing, guests have gotten wise and are shopping on multiple platforms for the same property and comparing deals.  If Vrbo is not competitive due to rates, the guest will find you on FlipKey or someplace else and book.  I try to steer all my business to Vrbo (they get my best rates) but I've actually had a couple of guests recently contact me from multiple sites and actually start a conversation on both!  I had one guy recently who wrote me via one platform and referenced our conversation on the other (as in, "hi, FYI I am the same guy who asked for and got permission to bring my dog").

           

          Monster service fees are a dangerous game.

          • Re: Service fee - Maximum?
            feibus Senior Contributor

            The max was removed months and months ago.  Let the market decide.

             

            Your own web site is still the best game in town for guests... if you made it easy for them to find you.

            • Re: Service fee - Maximum?
              kmcbhense Contributor

              I've had $599 max vrbo service fees on my high dollar inquiries. Highway robbery!  Just wait until down the pipe you'll be seeing those service fees on the owner/manager as well.

                • Re: Service fee - Maximum?
                  wildiris Active Contributor

                  I've only received 3 bookings through Vrbo this year.  The price of my subscription equates to an 11% "service fee" on these bookings.

                    • Re: Service fee - Maximum?
                      feibus Senior Contributor

                      That is what PPB is supposed to offer as an alternative for owners who don't rent much on Vrbo.

                        • Re: Service fee - Maximum?
                          wildiris Active Contributor

                          Yes.  I had been on subscription for years and switched to PPB in 2018 when I only received two bookings through Vrbo in 2017.  In 2018, I received five bookings through Vrbo on PPB and switched back to an annual subscription in the fall of 2018.  This year, I've only received three bookings through Vrbo and would have been better off if I had stayed on PPB instead of purchasing a subscription.  (Funny, how this seems to work.)

                            • Re: Service fee - Maximum?
                              feibus Senior Contributor

                              Pretty much "a given" that it'll work out that way.  I'm bailing on another platform subscription because I got something like 200 inquiries and 2 bookings. Not worth my time to handle all those inquiries, but I'll probably get really scared during the upcoming year having fewer inquiries to respond to....

                        • Re: Service fee - Maximum?
                          feibus Senior Contributor

                          I hear what you're saying, but a guest who can afford a "high dollar" place, doesn't look at a $600 service fee as a serious deterrent.  You'll still find people looking to bargain shop, but it's more for sport at that level and not because they're on a tight budget.  Tight budget people don't look for high dollar rentals in the first place.

                           

                          It's why I don't discount.  We're not budget, but we're not high dollar either... we just don't want those who are trying to fit us into their tight budget while they have no issue spending $500+ per day on Disney World.

                            • Re: Service fee - Maximum?
                              u0999 Premier Contributor

                              "I hear what you're saying, but a guest who can afford a "high dollar" place, doesn't look at a $600 service fee as a serious deterrent."

                              No, but it just means that one's property is under priced by at least $400 ( leaving $200 for vrbo's "price of name recognition"). I am surprised that owners do not see that. The more "service fee" goes up, the more downward pressure is on owner's rate (and income). Granted in some markets it may be less noticebale and effects may be delayed due to higher demand than other markets, but sooner or later....

                               

                              $Z - renter's total budget

                              $X - owners rate + tax

                              $Y - "service fee".

                               

                              $X + $Y = $Z.

                              that means that $Y (service fee) is growing, then  and $X (owner's share of the pie) is shrinking. 

                                • Re: Service fee - Maximum?
                                  feibus Senior Contributor

                                  You may be missing what I'm saying.  Someone looking at a high $$$$ place, they don't have a "renter's total budget" for the home that they try to fit just under that number.  They just want what they want -- comfort, style, convenience, size, amenities, some combination of factors -- and as long as they don't feel like they're being cheated by the price, they'll rent it and not think twice about the service fee that gets imposed.

                                   

                                  I go skiing every Christmas, rents are usually between $450 and $700 per night for a 2 BR condo near the slopes.  I don't choose the $450 over the $500 because of the service fee.  I don't even look at the service fee until the end and then decide if I'm going to find the same home on a different platform.  I'm looking for comfort and convenience (and an in-home W/D) primarily, not price once we get to that price range.  Overspending by going to the slopes over Christmas is already built into our mindset.  If we wanted cheaper, we'd do spring skiing instead.

                                   

                                  On the other hand, we're doing 2 nights in my old college town in October and that one was definitely all about price and comfort, not convenience or amenities.  So we're getting a place that's $90/night and 30 minutes outside of town and will likely not even look at the service fee, since it'll end up being pretty small anyway.

                                    • Re: Service fee - Maximum?
                                      u0999 Premier Contributor

                                      I am sure there are some renters like that. But they are not in my market, by in large. In my market you can "win" or "lose" a booking over $10/night difference. Our rates are in the middle, they are not $700 a night and not $90 either. So it hits that price sensitive range. I am sure we can all give examples of our personal experiences, but we are not our own clients.

                                        • Re: Service fee - Maximum?
                                          feibus Senior Contributor

                                          But I'll also bet none of your guests are booking a high enough $$$$ to warrant a $600 service fee either.  Biggest service fee I've seen for my guests was on a 2 week stay and it was about $200.  Neither of us have $500+/night places... so our clientele do shop a bit on price, but the service fee isn't the big deterrent in the grand scheme either.

                                           

                                          And they're always free to find my web site by my headline and pay no service fee.

                                • Re: Service fee - Maximum?
                                  u0999 Premier Contributor

                                  so that brings a question.. do they provide more "service" for $598 vs $499> and what are those services exactly? Do they provide more service when 2 people book vs 4 people books (which also affect the "service fee"). I think we all know the answer. I suppose I could live with higher service fee as long as it is flat.

                                  realtors do not charge more is they are selling a house for 1 singe owner vs family of owners. It is still same commission.