We’ve all been there. You’re making travel plans and looking for that perfect vacation rental. You’re scrolling through rental after rental, and then–there it is. You glance at the nightly rate the online travel agency (aka the “OTA” such as Airbnb, Vrbo, etc.) shows and then click on the listing. When the full listing opens you see not only the nightly rate, but also a list of additional fees.
What is that all about?
It can be discouraging to see additional fees listed after being shown just the nightly rate, so we wanted to take a moment to shed some light on what is often an unwanted surprise.
First, A Little Background
The first thing to understand is that the OTA, such as Airbnb or Vrbo, does not directly manage these vacation rentals. This means they don’t create the pricing or the fee structure. The homeowner or their hired property manager creates the pricing and the fee structure for the vacation rental. If it’s an individual homeowner, they likely do this directly on the OTA. A property manager uses software to manage pricing and fees for their multiple vacation rentals, and most use a third party to facilitate a connection between their software and the OTA.
The only fee that doesn’t come from the homeowner or property manager, is the service fee charged to guests by the OTA.
The OTA simply provides a service. Instead of travelers having to search the web for individual listings advertised in a variety of ways, they can visit a single site and view listings from homeowners and property managers that have chosen to advertise on that site. If it’s a well known OTA, the traveler can easily compare hundreds of vacation rentals from one site instead losing an entire day of their lives deep diving into the world wide web.
So, what’s the deal with all the fees?
Fees are either rolled into the nightly rate or broken out into line items. Either way, the cost of managing a vacation rental is the same.
And the truth of the matter is that a lot goes into managing a vacation rental. The most common extra fees are taxes and the cleaning fee. On top of that, there may be a resort fee, an amenity fee, etc. How those fees are structured is up to the homeowner or property manager. We choose to break out fees instead of rolling them into the nightly rate. Not only does this make sense from an accounting perspective, it also allows guests to see exactly what they’re paying for.
The most common questions we hear are often about cleaning fees. This fee can seem high, especially when you’re booking a single night and especially when you’re accustomed to reserving hotel rooms. A hotel is a prime example of an entity that rolls costs into the nightly rate. Are hotel rooms cleaned? Yes. Is there a cost for this cleaning service? Absolutely. Do guests pay for this service even though they don’t see a line item charge for it? Yep. It makes sense for hotels to do this since most provide daily cleaning services. Furthermore, cleaning services for a hotel likely cost less as they are very streamlined: all the rooms are located in a single building, each room minimally furnished, and all rooms nearly identical. Since the cost is lower, it doesn’t have as big an impact when it’s rolled into the nightly rate.
Cleaning services for a vacation rental are different. We manage vacation rentals all across Summit County, an area that spans 620 square miles. On top of that, each vacation rental is often unique and furnished like a home (because it is someone’s home!). Vacation rentals commonly offer full kitchens, multiple bathrooms and private bedrooms. Cleaning a vacation rental is much more involved than cleaning a hotel room, which is why daily cleanings are not provided. This also means the cost of cleaning services is higher. For these reasons, it makes more sense to break the cleaning fee out into its own line item.
And since the cleaning fee is its own line item, this means that the cost of a check-out clean is the same whether you’re staying for one night or 10 nights. If the cleaning fee was rolled into the nightly rate, you would be paying more overall.
Why isn’t the total cost of stay advertised?
We have the same question. Why doesn’t the OTA advertise the total cost of stay in search results instead of the nightly rate? Advertising the total cost of stay would allow travelers to more easily compare the vacation rentals in front of them. We can’t definitively provide the answer on that, but a good guess is that it’s due to restrictions and difficulties that arise with software and coding. On our own website, we do have the ability to show the total cost of stay in our search results when dates are entered. Hopefully, OTAs will be able to provide this same functionality soon.
While we wait on technology to catch up to our desires, here’s what we suggest in the meantime: Make sure you’re always comparing the total cost of stay when searching for a vacation rental or a hotel. It’s one extra click to see that total cost of stay when you’re combing through search results, but it’s well worth your time when you’re trying to get the best bang for your buck.