Monday, November 23, 2015

Homeaway Listing: Annual Listing Fee or Commission Based?

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With the impending acquisition of  Homeaway by Expedia, the move from annual listing fees to commission based listings is likely to accelerate. So, which is better: annual listing fee or commission based listing?

Well, there are certainly some advantages to the commission based listing.

Firstly, you save the price of the annual listing fee! This means that, assuming you continue to get (at least) the same amount of bookings, your profits from renting your property will increase.

Secondly, it is likely that Homeaway will give preference (e.g. in listing searches) to commission based listings. After all, any bookings generated give Homeaway incremental revenues, so they will have a strong incentive to promote these listings. (This may include promoting your property on other Homeaway owned sites that your standard annual listing does not cover.) This means that your bookings through Homeaway are likely to go up!

Of course, there are also some disadvantages to commission based listings as well.

For example, although you may save on the annual listing fee, that extra revenue that Homeaway generates must come from somewhere: and if your guests are only prepared to pay the same amount, then surely it must come out of your pocket i.e. you will get less revenue per booking than you currently get ?

Perhaps not ...

A couple of years ago, when Holidaylettings launched their Commission Based listings option, I signed up for it and kept my prices at the same level as I had on other annual listing fee sites. I reckoned that any bookings I got through the HL site would be a bonus. Because I was getting the same net price, it would cost me nothing.

Even at these "higher prices", I now get a substantial portion of my bookings through HL: the renters are paying more than they would on other sites, but they seem to be prepared to do so! I suspect the same will happen on Homeaway, so my advice is to seriously consider a commission based listing.

(By the way, commission based listings on Homeaway are not yet available in every country.)