Exposing the High Cost of Renting a Vacation Home

Know where the best value is without paying little or no service fees.

Renting a Vacation Home can be a joyful experience. You have separate bedrooms, multiple bathrooms, and having the convenience of cooking your meals.

It doesn’t matter if there are two people or ten people; having the extra room and not living in a small hotel room for a few days or more can do wonders for the mental state of everyone.

I have used sites like VRBO and Airbnb for over 15 years all over the world. Porto, St Croix, Madrid, Budapest, all over the USA, and many more to mention. You get the idea.

All of the vacation sites started with bringing homeowners and vacationers together at a fair price.

Then the big corporations bought out all these sites, and like any corporation, how much money can they put into the bottom line. They don’t care about the homeowner or vacationer because they look at how much revenue they can make from each.

There has been a lot of consolidation in the industry.

Expedia owns HomeAway and VRBO. Tripadvisor owns Flipkey and Housetrip. Airbnb has 11 subsidiaries under them.

The fees for renting from these companies are getting out of hand. There are Cleaning fees, Service fees, Occupany taxes, and fees that can rise to over 40 percent of the listed rental per night.

The following are some examples and the cost of renting. I will use VRBO, Tripadvisor, and AirBNB for the exact location to show you the price of each. To be consistent, I picked London, England, and Kissimmee, FL (This is next to Disney World ). Both places are two-bedroom and two-baths. The cost for each night will be as close as possible.

There are many differences, Tripadvisor charges $40 more for the same type of room but doe not charge a cleaning or Occupany tax. In the end, you still would be paying close to $200 more for seven days. The other interesting observation is Tripadvisor was the most expensive in London and the cheapest in Kissimmee. I am not saying one site is better than another; I want you to know how each can be different.

Things to be aware of:

The fees are not consistent. There could be all the fees mentioned above in the same city with the same company or only one. In London, I looked at VRBO only had a service fee cost per night was $228, $1595 for 7 nights, and a total cost of $1762. Another place had all three fees, the price per night $298, $2086 for 7 nights but a total cost of $2545. As you can see from these examples, the fees were quite different. The first one was just over 9% of the total cost; however, the second was 22%. A third one I clicked on was $311 a night but had a weekly discount of 10%. It also had a cleaning fee of $117 and a service fee of $240 but not other taxes. The total cost was $2533.

The fees amounted to 14% of the total cost. There is no hard and fast rule for the fees or pricing. All three of these places were less than one mile from each other.

Another inconsistency is when there is a discount on a weekly stay. I have seen it range from 1-25%, in the same city.

Tripadvisor charges 8-16% on top of the price. The price is usually closer to 16% than the 8%. They do not show this fee when booking through them until you put in your credit card information. It lists the cost of the home and any fees the owner is charging. Then surprise, you now are paying hundreds of dollars more. They are also assessing the homeowner another 3% of the total rental. They are making a minimum of 17.5% on each booking.

Here is the explanation of the booking fees per the Tripadvisor website:

The booking fee varies based on the rental price. It ranges from 8% to 16% of the rental rate. It’s sometimes lower, but not higher. The fee is automatically added to your invoice upon booking.

What happens to the booking fee when a booking is canceled?

· If you cancel the booking – the owner’s cancellation policy will apply, and the booking fee will not be refunded. You can see the cancellation policy by logging into your inbox.

· If the owner cancels the booking – you will receive a full refund of the booking amount you’ve paid so far, including the booking fee.

Be aware when you are on a site that you think has no fees. An example of this is byowner.com. When you select a place, it might take you to the VRBO website, and now you are paying fees.

Ways to save and pay less or no fees:

If staying a week ask for a weekly discount. Always ask for 25%; if the owner says yes, you are in great shape; if they say less, you are still getting savings. If they say, 10% go to 20%. Depending on the time of the year and the high or low vacation season, you will be surprised how much discount you may receive. Even getting 75% of the rent is better than nothing at all.

If You Want to Avoid the Service Fee, ask about the service fee. Many of the property owners I emailed said they were happy to deduct it from the total cost of their rental. While this may not always be the case, it never hurts to ask. You should always negotiate your rental with the owner when you book a vacation home. Not only can you get a deal for booking early or at the last minute, but you can sometimes get their “best price” and a discount just by asking what they’ll offer if you pay that day. Per the rules in my book “ IF U Don’t Ask,” think outside the universe; the box is too small. Come up with creative ways to pay less.

Once I ask the owner to have flowers delivered to the vacation home for my wife when we arrived. The owner thought it was so thoughtful that he didn’t even charge me for the flowers. That is excellent customer service, and we would rent from him again.

Don't use the Travel sites:

Book directly with the owner, resort, or management company. Any owner or good management company will have an easily verifiable online presence with reviews and a website. If you find a unit you like on VRBO, Airbnb, Tripadvisor, or any other website with a service fee, spend an extra couple of minutes to find the owner directly, it can save you hundreds on your vacation rental!

If you are going to a popular vacation destination, check with the realtor companies in that area. More inventory is available, and the cost compared to the websites mentioned above is significantly lower in price.

For example, if you and your family were going to vacation in the Outer Banks in North Carolina, there are over 45 realtors to help you find your perfect vacation home. I have compared prices of like homes with both a realtor and Vrbo in the area of Avon on the Outer Banks.

I picked a four-bedroom, two-and-a-half-bath staying one week in June 2022.

The realtor's house was Ocean Front at the cost of $2517. The only fees were local taxes of $321 for a total cost of $2838. There were also payment options. Pay all at one time, Pay half at the time of booking and a half one month before arrival or pay $300 at the time of booking and twelve equal payments.

The house from VRBO was semi-oceanfront at the cost of $2314. After the host fees were $355, the service fee $294, and the tax $308, the total price was $3272.

Going direct with the realtor, you would have saved $434 and had an oceanfront home instead of a semi-oceanfront home.

Lastly is a website called Vacation Home Rental Network www.vhrnetwork.com

VHR does not charge a booking fee. Their network stretches from United States, Canada, the Caribbean, Central and South America, and Europe. When you click on the area of the world, there are limited destinations in that region. The site is not a great site at present but could be in the future when both owners and renters become tired of paying all the fees.

Botton Line:

Staying in a vacation home is a great way to get away with your significant other or the whole family. I have given you the tools to save money and enjoy a night out on the town with the money you have saved. Happy vacationing!