Rhonda Moret’s vacation rental in Park City, Utah, came with a few surprises.
First, there was a $25 “check-in” fee when she arrived, which, though disclosed in the fine print of her contract, was unexpected. And then there was a mandatory $200 “cleaning” fee for her unit after she checked out. Neither was part of the original price.
To add insult to injury, a construction crew in a nearby unit woke her at 7 a.m., on her first morning at the mountain resort.
“So much for relaxing with the mountain breeze,” says Moret, a healthcare marketing consultant who lives in Del Mar, Calif.
Don’t look now, but vacation rental companies are piling on the fees, many of them pure junk. Among the most common: booking fees, change fees, cleaning fees, hot tub fees, parking fees, reservation fees and — everyone’s favorite — amorphous “convenience” fees.
Simply put, rental fees are exploding. And there’s a reason why.
“Rental managers only get a commission on the rental part of the transaction,” explains Andrew McConnell, the chief executive of VacationFutures, an online vacation rental marketplace. “But most negotiate that they get to keep 100 percent of fees. In this way they can make owners think they are getting a great deal with a lower commission, but actually take more of the all-in revenue by shifting more of the revenue to other fees.”
It’s a model that closely follows the one used by airlines, which quote a low base fare but then add fees for everything from carry-on luggage to seat assignments — items that had traditionally been included in the price of a ticket.
These fees seem to be getting worse, although no one formally keeps track of them. Reputable vacation rental companies are resisting the surcharges, but eventually, the lure of easy money may prove too difficult to turn down.
While it’s true that vacation rental owners and managers have to shoulder expenses that other lodging companies like hotels don’t, renters will invariably say there is only one right way to sell a rental: by quoting a price that includes all mandatory fees.
But the vacation rental site Vacasa.com recently tested customer pricing preferences on its site and determined that more guests booked a vacation rental when they saw a low base price with the added fees broken out.
“Customers actually preferred to have each tax and fee line item listed in the quote,” says Scott Breon, Vacasa’s chief revenue officer.
Of course they do. Time and again, travelers claim they hate surcharges, but then are lured by the product with the lowest price tag, even when the added fees may ultimately make it more expensive. Businesses say they’re simply meeting a demand.
“Fees are the perfect way to alienate your customers,” says Michael Straus, who co-manages a ranch and organic farm in northern California that can be rented. At the Straus Home Ranch, the fees are simple: a cleaning fee and a refundable security deposit.
That’s in line with the industry’s so-called best practices, which roughly translate into “the thing they ought to be doing.”
“Disclose all fees up front,” says Isaac Gabriel, the president of EZ Resort Vacations, an online timeshare rental marketplace, “regardless of the amount.”
But the revenue vacation rental companies and owners receive from these fees is hard to turn away. In many ways, fees are the ultimate win-win for rental owners. You can quote a low price, making your rental look cheaper than the competition with an all-inclusive amount. Then you can pile on the extras and make lots of extra money.
Bottom line: as always, buyer beware. “Review the booking policies on the management company’s website, and ask a representative questions about rental cleaning or additional occupancy fees to avoid unnecessary and surprising charges,” says Mark McSweeney, the executive director of the Vacation Rental Managers Association, a trade group.
Vacation rentals are fast becoming the most fee-happy segment of the travel industry. Don’t get taken.
How to avoid a vacation rental ‘gotcha’
• Do your homework before booking. “Ask if there will be any additional fees or charges before placing your deposit,” says Jeanne Dailey, founder and CEO of Newman-Dailey Resort Properties, a property management company in Northwest Florida. Steer clear of a rental agency you’ve never heard of or that has bad online reviews. Reputable agencies don’t charge junk fees.
• Watch the big fees. Change fees are the worst, ranging from several hundred dollars to the cost of the entire rental. They’re often unavoidable, but a good insurance policy can protect you if you need to change your vacation plans, says Devon Puryear, revenue manager for Palmetto Dunes Oceanfront Resort on Hilton Head Island, S.C. “Travel insurance is often offered when renting a villa or home, usually through a third party,” he says.
• Make them explain. Some fees, like the “convenience” fee and the “hot tub” fee, are so absurd that a company may have some trouble justifying them. If you’re confronted by a surprise fee, even after doing your homework, challenge it. You may be able to negotiate your way out of paying it.