The Marketplace Feed on owners' dashboards has an article entitled "Put Your Best Price Forward." I took a look at it. I was particularly interested in HomeAway's advice to owners regarding refundable damage deposits. Here's what the article says,
"Refundable damage deposit
You need peace of mind when it comes to potential damage in your vacation home. However, a refundable damage deposit is another upfront fee for travelers.
- Build an additional amount into your nightly rate instead of using a refundable damage deposit. This helps eliminate the perception of an extra fee. You can use those additional funds in case of damage at any point.
- Avoid setting a refundable damage deposit that is more than double your nightly rate.
- Offer property damage protection. It’s a low-cost option for travelers and it can protect against accidental damages."
At the outset, I have to state that I am a firm believer in refundable damage deposits. I believe they provide an excellent incentive for guests to take better care of my vacation rental because the guest wants to have his refundable damage deposit returned to him at the end of his stay. So, why is HomeAway trying to discourage owners from having a refundable damage deposit?
First, HomeAway charges the traveler's service fee on rent and the owner's fees. It does not charge a traveler service fee on refundable damage deposits. So, it's in HomeAway's financial interest for owners to "build an additional amount into your nightly rate instead of using a refundable damage deposit." HomeAway will make more money if owners do this.
Second, HomeAway holds refundable damage deposits in escrow until the guest leaves. If a guest damages the vacation rental, an owner contacts HomeAway about how much money should be withheld from the damage deposit. No doubt many guests dispute this amount. There's an expense for HomeAway to administer the refundable damage deposits. If HomeAway can convince owners to do away with refundable damage deposits, HomeAway will make more money.
Third, per the HomeAway website, the Property Damage Protection is "provided through HomeAway, Inc. and administered by CSA Travel Protection and Insurance Services." HomeAway isn't marketing the PDP insurance for CSA out of the goodness of it's heart. HomeAway is being remunerated in some fashion for doing this. My guess is that it receives a percentage of each PDP policy that travelers buy through the HomeAway website. In my opinion, the PDP provides no incentive for guests to be careful. They are already out-of-pocket for the PDP and won't have the premium refunded if they don't damage anything. Also, remember that owners are not the insureds under the PDP. The guest is the insured. If the guest denies causing any damage, the PDP won't pay. Further, the PDP only provides coverage for accidental damage caused by the guest. It does not provide coverage for intentional damage. If a guest throws a beer can through your wide-screen TV, the PDP won't pay. So, why does HomeAway recommend that owners use the PDP instead of a refundable damage deposit? Because HomeAway will make more money.
I understand that HomeAway's goal is to maximize it's profits. My goal is to maximize my profits. HomeAway is not being transparent in it's advice to owners. In my opinion, HomeAway's advice regarding Refundable Damage Deposits benefits HomeAway only, not owners.
Edited by wildiris.