Los Angeles, CA · Member since 2016 · 565 posts · 391 votes
Bad news announced today. The new release is removing the ability to contact guests by hiding their emails and phone numbers and filtering them in the messaging.
Given the fact VRBO is awful in vetting the guests, this is going to make them less desirable.
I guess I was lucky to use my last "long stay" (3 weeks) out of vrbo just 2 weeks ago for this August. Now longer stays are going to be hurt, since the fees and %s become unacceptable on longer stays and bigger amounts. New opportunity for those "corporate housing" websites? Maybe.
There are other changes, but this one seemed the most important to me.
Rental Property Investor · Chatham, MA · Member since 2015 · 75 posts · 65 votes
9y
VRBO keeps rolling out "new coke" moments since the Expedia takeover. Airbnb innovates, VRBO copies.. poorly.
They are moving to onlne booking only, which makes sense. But I am sure the next push will be for instant booking. I love the explanation for restricting communication. It is all for the sake of "protecting users from phishing". Insert big belly laugh here.
Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
9y
I get 95% of my bookings from Airbnb. Cannot contact guests other than the messaging service until they're booked on Airbnb. I've never had a problem.
Anytime I get an inquiry from VRBO I roll my eyes and say "great, another old person"
Rental Property Investor · Chatham, MA · Member since 2015 · 75 posts · 65 votes
9y
I agree with the common observation here, that the Airbnb pricing app is set too low. I tried a few of the 3rd party dynamic pricing apps and have found some success with beyond pricing. Their data seems to be on point for my area.
VRBO's push to limit host/guest interaction is certainly an attempt to keep users from making transactions outside of the platform. However, I believe they drove users to that end by changing their fee structure so radically.
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
9y
@Luke Carl, So you roll your eyes at money? Because those "older people" aree typically in their 50's. They can and are willing to pay top dollar to take their family on vacation and are less likely to be throwing parties. These older people also take very good care of a property. My model may be different than you as I am not renting a room or running a Bed and Breakfast (AirBNB) people who are going on vacation think of Vacation RBO. I only keep my Airbnb account active because it costs me nothing to do so. I did get some young people to book it for a football game. I realized that I had my price too low by mistake. If I had the correct $400 per night price they may have looked for a Super 8 Motel or a room share deal instead. I honored the price so I could start getting some Airbnb feedback like the 50 plus 5 star reviews I have on Homeaway. I'll probably also do some discount nights to cater to the young people using Airbnb in the off season to build up some more reviews.
Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
9y
@John Underwood lol easy big John. VRBO just doesn't work for me. I'm from the iPhone generation and if you saw my Airbnb numbers you'd roll your eyes at VRBO also.
And I'm not renting a room I'm renting the whole place. Airbnb isn't for couch surfers. You stick with your old people that complain the comforter wasn't $1000 and I'll take all of your Airbnb business.
I hope that AirBNB starts working better in my area and for me. I searched and there aren't many people using it in my area so I thought I should get an account thinking there wouldn't be much other competition. So far no go. I'd like to not have most all of my eggs in one basket and maybe things will improve in the future. We all have to go with what works for us and I'll take all your VRBO business... for now. I really need to create my own website and funnel repeat customers to it.
Investor · Roseville, CA · Member since 2016 · 893 posts · 1k+ votes
9y
@Michael Greenberg I just read what the announcement closer was now and I don't think it will pertain to my Evolve setup. Evolve handles all pre-booking inquires for me anyway and since they release the info after booking completes that is the only time I even know there is a guest coming anyway, so nothing new for me at this point. :) Just thought I would pass back to you since you were curious.
Los Angeles, CA · Member since 2016 · 565 posts · 391 votes
9y
@Leigh Ann Smith, @Ariel Smith I don't deal outside airbnb / vrbo either, for the exact reasons you mentioned. Only rarely. Here's the most recent case I took the guest off vrbo:
Inquiry from vrbo: Great guest profile, new to vrbo, no review, but very visible person on the web, great job, etc. Through vrbo she would pay $4800. I would earn $4100. She asked for a discount. I offered out of vrbo $4200 to be paid with cashier check and a contract to sign plus $1500 deposit with cashier check as well. All done within a week. Win-win, she got $600 discount, I got $100 more for a little bit more work.
So their fees (between 5 to 12%)+ insurance ($59 in my case) +payment clearance (3%), is all ok, for my average $800 guests. It's not worth the background check, contract, manual payment handling etc. But for $700 I was ready to go through that "pain" or "risk" :)
That's why when I started this conversation, I mentioned this as an issue for a longer term client. IMO either vrbo/airbnb have to quickly reduce their fees for longer stays, or I would want to use some of those "corporate housing" sites which may be a better solution for the stays in the range of 2 weeks-3 months.
Los Angeles, CA · Member since 2016 · 565 posts · 391 votes
9y
another thing which may happen: vrbo may (or should) remove the annual flat fee or reduce the per-booking fee. I was only on airbnb and started vrbo with their free model where they take 10% fee per transaction. The value I saw in paying the annual flat fee was to get access to more guest info for a background check and faster payment. Now that they have removed access to guest credentials, the 2 models are kinda redundant: they both have a significant per-booking fee.
Real Estate Agent · Colorado | stan.store/JamesCarlson · Member since 2014 · 2k+ posts · 2k+ votes
9y
As @Ariel Smith, @Kevin Lefeuvre and @John Underwood have already pointed out, the Smart Pricing is great ... FOR AIRBNB! I think they're playing a volume game. If they can capture some hosts who don't want to work and will only do Airbnb if it's more automated, then Airbnb gets more hosts and maybe more guests ... and more of their cut. I talk every once in awhile with an Airbnb rep here in Denver, and I know that they are desperate for more hosts. The volume of people coming to the Mile High City is outpacing the number of host rooms available. I think Airbnb tends to side more with their guests than their hosts. The new policy allowing guests to cancel three times a year without losing their Airbnb fees, for instance, gives guests more leeway to cancel, which hurts hosts.
That's my impression anyway. That's based, as others have said, on my experience that smart pricing came in WAY under what I knew I could get. Don't get me wrong, Airbnb and short-term rentals are awesome. Done right, I think it's the best return in real estate.
Los Angeles, CA · Member since 2016 · 565 posts · 391 votes
9y
Wow! Delisted? or just decreased ranking position on search?
They hate the rejections. On airbnb, cancel only ONCE and you lose super host status for 12 months.
I wish they could be more flexible if the rejection happened within a couple hours of booking. I understand a guest who has made all their plans, flights, car rentals, whatever and then get cancelled, that these sites would penalize the hosts. But if it is done within a very short period of time, it should be handled like an inquiry rejection IMO.
I agree with you @Andrew Wong since we pay a flat fee, this doesn't make sense. ( As said before their flat fee is now weird since they are no longer acting as an ad listing site, and more like a marketplace). Anyway, I would call the customer support and raise the matter strongly. One thing vrbo is good at is the easy customer support access and generally friendly agents: (8 7 7) 2 2 8 - 3 1 4 5
Actually they may be able to manually relist you. Let us know how it goes.
Investor · Orlando, FL · Member since 2016 · 152 posts · 86 votes
9y
Curious @Andrew Wong how are you defining crappy reservation requests? Obvious red flags, not a fit for your booking criteria like too many guests?
But that's awful to hear that VRBO is doing that.
@Kevin Lefeuvre I'm going to make another one of my predictions, VRBOHomeaway will fold in Payments (as opposed to the quasi-independent nature of it now) and add automatic Tax Services and justify it by moving everyone to the higher pay-per-booking flat % model at some point in the next year or so. This is when owners will see some "fee relief" in the form of a reduced service fee in trade for that higher % of the booking off the top.
Annual recurring revenue is great but I think the slice of the pie is too much to ignore them taking a larger portion of the payment instead.
Don't get me wrong, VRBO's lack of a tax payment is quite annoying and I appreciate Airbnb doing it for me, but that only gets me so far when the % they take is higher.
Los Angeles, CA · Member since 2016 · 565 posts · 391 votes
9y
@Peter R. assuming you are talking about TOT ... this time it's an easy bet my friend ;) or let's say I think it's obvious and fully agree :) As you said, airbnb already does this so that by itself is a good reason for them ... hahaha.
But I see it slightly differently. At least here in LA the information (or rumor) was that airbnb made this deal last year with the city in exchange for the june 2016 ordinance/project which made STR "semi-legal" or "less illegal". (it looks like it's in place in your city as well, but you may know airbnb is not doing this everywhere).
Actually even though we may not like it because of the impact on the per booking profits, I think it's in our interest to make sure this business is (or will become) explicitly legal and solid in the cities we operate. I see it less as a "service" for hosts, and more as a lobbying effort to save their own business (and ours of course, in the long run). Notice that we didn't have the choice and there were no complaint from the hosts when airbnb implemented it last year (at least in LA).
Also it's a great strategy to make the city dependent on our business. We should shoot for a situation where the cities NEED us, just like they need hotels tax income. And keep in mind that even in those cities where the STR is fully approved, they can still change the ordinance back and forbid STRs as they did it last year in Anaheim (lawsuit in progress between hosts and the city). So an ongoing pressure or incentive for the cities is really necessary and to our benefit.
Anyway, yes, I agree and am surprised they are so slow to implement it :)
Investor · Orlando, FL · Member since 2016 · 152 posts · 86 votes
9y
Hadn't thought about it from a lobbying perspective but you're right, that makes a ton of sense. Remove the step (owners) between Airbnb and the City and you get accurate taxes paid on time with less hassle. Much harder to vote out a revenue line item when the tax bill is paid in full for every stay, without question.
Investor · Milpitas, CA · Member since 2015 · 278 posts · 155 votes
9y
@Kevin Lefeuvre delisted. I'm not cancelling, I'm just declining reservation requests. I'm not paying the flat fee, I'm just using the free system. Not very interested in paying the yearly fee since in my area VRBO doesn't net as many users.
@Peter R., the guests never respond! They do an inquiry, I reply, and it's silence from there. Also a lot of them for me were inquiries for a month out or so, for a few days, which is not an ideal reservation for me.
I think VRBO just thinks "too many declines" means that I'm somehow circumventing them to do a custom reservation after I got their number.
Real Estate Agent · Colorado | stan.store/JamesCarlson · Member since 2014 · 2k+ posts · 2k+ votes
9y
@Peter R. and @Kevin Lefeuvre Interesting discussion. We'll see how Denver feels once they see the tax revenue coming in. I'd love to think that it would change some minds about the city's current primary residence requirement, but that's foolhardy when neighborhood associations -- who loathe Airbnb -- are so tight with the city council.
Denver doesn't currently have an agreement with Airbnb, VRBO or any other short-term rental platform. BUT, what they are doing is rewriting their tax laws to allow third-party vendors to collect on behalf of hosts. (What the city tells me is that they don't want to have to strike deals with each platform. Instead, they'll open up their laws to anyone. Now ... whether Airbnb or VRBO will actually start collecting and remitting those taxes is yet to be seen.) The treasury department guy says it will be done by the end of the year. I can tell you that hosts will be quite happy about that.
Rental Property Investor · La Quinta, CA · Member since 2014 · 1k+ posts · 779 votes
9y
We have been, and will continuing to enable guests to call us directly when they are coming through the homeaway/vrbo platform. Not many people are going to book a $15k wedding or a $10k family reunion without talking to someone in voice.
With that said, we still book many of these reservations through the homeaway/vrbo platform (typically the smaller and more normal ones though). I am sure if they aren't getting money from us, they will lower us towards the bottom of their search results or eventually sever the relationship.
Same thing with airbnb for us, although it seems we get fewer legit large event requests from airbnb.
Los Angeles, CA · Member since 2016 · 565 posts · 391 votes
9y
@John D. sounds like you have an exceptional property. Not surprised if airbnb is not sending you many leads. I guess wedding and event manager networks are as efficient for lead generation as vrbo.
I am assuming that those properties have a lower occupancy rate than a condo in Downtown LA. But as an investor, what would you say about the return on your investment? How do you compare the cap rate of that property for VR compared to a beach house or a downtown condo, if I may ask?
Rental Property Investor · La Quinta, CA · Member since 2014 · 1k+ posts · 779 votes
9y
@Kevin Lefeuvre we see exceptional returns. A million dollar property in our portfolio will do $200k-300k in gross annual rents or more (excluding event fees for something like a wedding, which requires additional oversight). We are often empty weekdays, but I am not worried about occupancy rates -- I am just worried about how much money comes in the door.
Rental Property Investor · La Quinta, CA · Member since 2014 · 1k+ posts · 779 votes
9y
I own nothing in Palm Springs proper, all of my property is in La Quinta, Indio, and Palm Desert where large restrictive changes to the laws governing short-term rentals are less likely. Although still, never know. One of the reasons I am not concentrating in any one city.
I think we'll continue see growth in our gross rents (so long as the economy stays strong), as people that used to rent in Palm Springs come to adjacent areas. The huge growth in the number of rental properties around the Polo Grounds (Coachella and Stagecoach Festivals) is starting to slow that growth a bit though, as there can be a glut of properties available during slower times of the year in that particular location.
Moving forward I'm looking mostly in the North Palm Springs and surrounding areas, and Joshua Tree as well, to get away from competing with the Festival houses during non-peak periods.