Vacation-rental website adds surcharge up to 9 percent on renters.
Housing rental website HomeAway is getting no vacation from damage control after introducing a service fee that customers say is cratering their businesses.
In February, HomeAway began imposing a surcharge up to 9 percent on travelers renting properties on its websites; the company previously only charged property owners.
Although charging both parties is not unheard of in customer-to-customer businesses — Airbnb charges both renters and property owners, and ticket resale service StubHub charges people both buying and selling tickets — property owners who have used HomeAway and sister website VRBO are outraged.
Several people have claimed that business is down as a result of the higher rental prices, and the fees led to a lawsuit filed recently in U.S. District Court in Austin, Texas, where HomeAway is based. Complaints also flooded the ConsumerAffairs website.
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Online travel giant Expedia purchased HomeAway last year for $3.9 billion, and the new fee is widely seen as a means of squeezing profit from the deal.
Nick Agnew, who lives in Evanston, Ill., and owns two houses that he rents in Saugatuck, Mich., said business appears to be down since the fee was introduced. His six-bedroom, five-bathroom beachfront house that fetches $750 a night would have cost a customer who inquired about the property for two nights in May an extra $118.65 — a 7.9 percent bump. Agnew said he never heard back after the initial inquiry.
“I think this will be a deal-breaker for people,” Agnew said. “I should be booking out the entire month of April and May right now, and I’ve yet to have anything from VRBO or HomeAway.”
HomeAway CEO Brian Sharples issued a 1,600-word statement explaining the new fees to customers — the money will be reinvested into driving more bookings, he said.
Agnew said he’s concerned that he will continue to see reduced bookings as a result of the fee, but he’s also annoyed that HomeAway wasn’t better at alerting users that it was coming. He said he discovered it on his own. Still, he plans to keep his properties listed on the websites.
“I’m going to stick with them because they’ve been a source for a lot of revenue,” he said.