Thursday, April 18, 2013

Holiday Lettings and Flipkey Move to Commission Based Listings

Both Holiday Lettings and Flipkey have recently announced options to list your vacation rental property for free and pay only a commission on bookings.

Holiday Lettings and Flipkey are both owned by Tripadvisor, so presumably there is a connection between the campaigns. It may be that they see this as being the best option to compete with Homeaway, allowing them to differentiate themselves from the vacation rentals industry giant.

From the point of view of the vacation rental owner, commission only listings offer the advantage of having no up front costs, unlike most sites, which have an annual listing fee of $100 - 300 ( or more, in some cases!)

Owners typically have a limited budget to spend on vacation rental listings and want to make sure they get good value for the money that they spend on annual listings. If they sign up and don't receive any bookings, that money is wasted.

The commission only option allows vacation rentals owners to publish their listing and they only pay in the event that they actually receive a booking. Both Holiday Lettings and Flipkey charge 3% commission, which on the face of it, seems fairly reasonable. (However, some other fees, such as Booking Fees can apply).

For many owners, adding a listing with Holiday Lettings or Flipkey is a low risk way to potentially generate more bookings, or fill gaps they currently have. There is nothing to stop Owners from charging slightly higher prices on Holiday Lettings and Flipkey than they do on other sites, such as Homeaway, in order to cover the commissions. In the event that they generate bookings, great! If not, then all that was lost was the time to create the listing.

When COHR published the offers from Holiday Lettings and Flipkey to our subscribers, there was a huge response, so it clearly got the attention of vacation rental owners. Both are well established sites, so they have a much higher chance of generating bookings than the many free vacation rental sites out there.

I have tried out the Holiday Lettings option and have been very pleased with the results so far. There are some things to watch out for (e.g. you don't get paid until after your guests arrive), but overall I would recommend you give it serious consideration. You can check out my experience below:

My experience with the Holiday Lettings Commission Only Listing

I  would be interested in comments from others.

Is this likely to become a broader trend in the industry? I think a lot will depend on how successful Holiday Lettings and Flipkey are with this approach. I suspect the Free Listings sites will give it some serious consideration, as it offers them a way to earn revenues as they try to convince highly sceptical Owners to try them out.

On the otherhand, I suspect Homeaway will be slow to offer commission only listings, at least for the time being, as they may be concerned it will cannabalise revenues from existing clients. It's possible they will try it out on some of their smaller brands first ....

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