VRBO has initiated their new service fee

Coconuts · Post by **Coconuts** » Fri Feb 19, 2016 8:37 pm

We had two inquiries for stays at our villas today, coincidentally both for Thanksgiving week at Plumeria (natch), and when we reviewed the quotes that VRBO generated for these inquiries, we spotted a brand new "service fee", which was a bit under 5% if you include the VI hotel tax. This shouldn't come as much of a surprise; I broke the news a few months ago that this would be coming sometime in 2016, as a result of Expedia's acquisition of VRBO/HomeAway:

http://www.virgin-islands-on-line.com/v ... =1&t=28035

Quoting from the Expedia press release from last fall announcing their forward plans: "traveler service fee, which will be based on a sliding scale, will begin rolling out in Q2 of 2016". Q2 of 2016 would appear to have to contracted to, uhh, "now".

We would, of course, prefer that our guests didn't have to deal with this added financial burden. That said, the service charge that VRBO has added is way lower than the fees that FlipKey charges (nearly 10%), whose system is also far less easy to navigate. It is comparable to that of Caribbean Villas (5%), which is the largest St. John villa management company. There are also a number of aspects of the VRBO experience that help justify some level of service fee. The experience of selecting a villa and booking your stay via VRBO is really easy; they serve as a trusted intermediary that processes payments via credit card or eCheck, automates deposit, final balance payments, and other communications, and also offers cost-effective trip insurance and rental fraud protection. We have the impression that they will be adding additional services during 2016 to help further justify this new charge. Guests always have the option to contact villa owners directly, although we (at least) don't yet have the ability to process credit cards, and if we added that capability, it would inevitably come with credit card processing fees. For regular visitors to St. John, repeat guests, or folks who happen to know us, booking through direct owner communication and then mailing us a check and arranging trip issuance on their own is a perfectly reasonable approach. For new visitors, in our opinion, the security and simplicity of working with a trusted intermediary such as VRBO probably justifies this new service charge. St. John also remains a vacation destination with zero sales tax, meals tax, and value added tax. The members of our online community at VIOL have an enormous amount of collective expertise in these matters, and we are very interested to hear your opinion.

All the best,

Kevin and Danielle
http://www.cocoplum.vi

Beachboy · Post by **Beachboy** » Sat Feb 20, 2016 1:10 pm

I am not sure why, but my bookings are down versus last year. The tax increase and VRBO fee are probably part of the reason but I suspect there are other things as well.

How are bookings going for other propety owners this year versus last?

loria · Post by **loria** » Sun Feb 21, 2016 10:20 am

coconuts-- i do all my transactions directly (i don't use the book thru VRBO option) --I am wondering if that will impact our listing (i am sure it will) -- I would be interested to know how your customers react-- do they like the added security ??

Coconuts · Post by **Coconuts** » Sun Feb 21, 2016 12:19 pm

loria: By the end of 2016, all owners on VRBO/HomeAway will have to use online booking, but you will still be able to have guests send you a check by mail. VRBO will charge the guest the service fee via credit card, and then you can either choose to process payments via VRBO, or deal with the guests directly. For folks who are new to the island and/or our villas, having a trusted intermediary almost certainly is preferred. Folks can get a little nervous when they consider mailing large checks to strangers. VRBO is also committed to rolling out additional guest security enhancements this year, as well as doing a lot more TV advertising. You can get a sense of what 2016 has in store here:

www.vrbo.com/info/upgrades

BB: We haven't seen any slow down due to the uptick in the hotel tax, and the VRBO service fee just started on Friday, so if anything, there may have been more inquiries from folks hoping to book before it went into effect.

All the best,

Kevin

mbw1024 · Post by **mbw1024** » Sun Feb 21, 2016 8:26 pm

Kevin, are you saying that you suspect VRBO will be adding services for me, the renter, to justify this "fee". What exactly could that be that would entice me?

We are due to travel down in May. Because of a lost job and the time it took to recover from that we have not been to STJ since 2013. I already suspect that will be even longer until our next trip. Airfare is crazy, hotel tax up and now they preferred way I like to rent my villas costs more. None of those things on their own would likely make me think twice but when you start stacking them on top of each other.... with the airfare being the real deterrent...things start looking grim.

I ended up in STJ because I felt priced out of Bermuda, where I went for many years. Things are starting to look similar.

Coconuts · Post by **Coconuts** » Sun Feb 21, 2016 10:44 pm

Mary Beth: VRBO is claiming that they will be adding new features for the traveler, but I'm not sure that they would be of much value to you. The ones mentioned so far (coming, not yet in place) include:
• Full payment protection against things such as fraud, a listing being double-booked, property misrepresented, and the home being foreclosed or in bankruptcy.
• Access to 24/7 customer service regarding booking and trip details.
• Emergency rebooking assistance.

For St. John regulars, and especially those familiar with prospective villas and their owners, I'm not sure what if anything these or similar features would offer. For first-time visitors, insecure about dealing with unknown owners, these sorts of features make more sense. Of course, prospective guests can always contact the owners directly, and arrange to mail payments, so as to avoid the service charge.

I appreciate your comments regarding the Hotel Tax increase from 8%, to 10%, and now 12.5% affecting your decision, as well as the significant increase in airfares. Back when American and Jet Blue were competing for the Caribbean, and then during the slump in demand from the great recession, airfares to the VI were really attractive. Jet Blue achieved market dominance as American withdrew from the Caribbean, raising rates in the process, and demand has ramped back up for much of the year. Current airfares unfortunately reflect these facts. We have seen $1K+ round trips plus during primary and high school break weeks, and little sign that the current higher fares are likely to subside. That said, deals can and do pop up from time to time, and the island does still offer a variety of reasonably affordable accommodations. Best wishes for your upcoming visit!

All the best,

Kevin

Marcia (Mrs. Pete) · Post by **Marcia (Mrs. Pete)** » Sun Feb 21, 2016 10:58 pm

We've been completely priced out of STJ. There is simply no way we can justify the expense over so many other options around the globe.

mdcoles1 · Post by **mdcoles1** » Mon Feb 22, 2016 9:02 am

If I was a first time visitor, I would probably find the payment arrangements through VRBO comforting. Since I am re-renting directly with a property owner, I feel comfortable paying directly. I do purchase trip insurance.

I just booked a return trip in October. This will be our 6th visit. I was shocked at the price of air fare. In our case, we were able to use airline points, as my husband travels weekly for this job. I was also shocked at the new tax rate. It really makes this an expensive vacation for us. I am not sure we would have booked this trip if not for the "free" airfare. We did decide to stay longer this time realizing it may not happen again for several years.

I do use VRBO for all of our vacations. That surcharge is going to make me reconsider renting that way. I will probably go back to using rental agencies.

Teresa_Rae · Post by **Teresa_Rae** » Tue Feb 23, 2016 2:24 pm

Coconuts wrote:when we reviewed the quotes that VRBO generated for these inquiries, we spotted a brand new "service fee", which was a bit under 5% if you include the VI hotel tax.
http://www.cocoplum.vi

I'm confused by this statement, can you please elaborate?

The tax is now up to 12.5%, are you saying there is an additional 5% service fee on top of that?

Coconuts · Post by **Coconuts** » Tue Feb 23, 2016 8:51 pm

Teresa_Rae: From now on, if you book a villa via VRBO/HomeAway (acquired by Expedia a few months ago), they will tack on a ~ 5% fee for using their services. Their villa rental system is very easy to use, and they offer a number of traveler services (which they plan to expand during 2016), but it is no longer free to the traveler. You still have the option to deal with villa owners directly, with no service fee. For experienced St. John travelers who know what villa that want to stay at, and are comfortable mailing checks to the owners, going direct and skipping the service fee is an easy call. For first time or so visitors, who value having a trusted intermediary and are willing to pay a bit more to get it, VRBO/HomeAway remains a very effective choice.

All the best,

Kevin

Summerlover · Post by **Summerlover** » Thu Feb 25, 2016 5:22 am

Thanks for the heads up on this new service fee. Your 2 gems are on our list of places to stay in St John if we can nab the booking fast enough.

TraumaQueen · Post by **TraumaQueen** » Sun Feb 28, 2016 2:28 pm

This will be our last trip to STJ for a while. Airfare is killing us. I was able to find a "steal" for our trip in June at $620pp. Today those same tickets are $750 and I'm talking coach, not the Comfort+ upgrade nor first class. This year there are 4 of us (bringing the teens) vs 2 so we are only staying 8 days vs the usual 10. Add the extra room cost and extra food cost and it's quite a difference in price. I love STJ, but as someone else said there are many more places I want to see that are more reasonably priced so we'll have to put STJ on the back burner for a while. I never thought I'd say that, but the prices have made it difficult to justify. This year's walk of woe will be an especially painful one

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