Expedia-owned HomeAway recently released an updated Listing Agreement for Property Managers which includes language for integrated property managers (PMs) that is causing anxiety in the vacation rental management community.

Last month, HomeAway announced that it will be further monetizing its platform by assessing fees for off-platform bookings. According to HomeAway chief commercial officer, Jeff Hurst in a previous interview with VRM Intel, the commission would be equal to 10 percent of the pre-tax booking total. The new agreement, however, gives HomeAway more flexibility stating, “. . . such rates may change upon reasonable notice to PM.”

But that is not the change that is upsetting PMs.

While HomeAway maintains that the PM’s decision to attribute bookings that originate on HomeAway’s sites is completely voluntary, the new listing agreement sent to PMs last week sheds light on the processes HomeAway intends to utilize in holding PMs accountable for paying for off-platform bookings. Included in the agreement are expanded off-platform booking definitions, a new set of reporting requirements, and a mandatory submission to internal business audits conducted by HomeAway.

Read the entire updated Listing Agreement for Property Managers

“How disappointing it is to read this, and (it) goes directly to a lack of integrity at the highest levels of decision making at HomeAway,” said Tim Cafferty, president at Sandbridge Blue Realty Services in Virginia and Outer Banks Blue Realty Services in North Carolina. “In spite of assurances verbally of their honorable intentions they continue to act in a disingenuous manner. It reminds me of the saying by Ralph Waldo Emerson, ‘Your actions speak so loudly, I can not hear what you are saying.’”

Notable Additions to the updated Listing Agreement

HomeAway’s Listing Agreement for Property Managers includes fresh language related to off-platform bookings and the tools HomeAway can use to police voluntary attribution of off-platform bookings.

First, here’s a glossary for PMs:

• Integrated Property Manager: Any PM who is integrated through software providers.
• HomeAway Lead: According to HomeAway, “A booking will be regarded as having originated from the HomeAway Network where PM receives through the HomeAway Network an inquiry, booking request, or other contact from or on behalf of a traveler about a Listing (each, a “HomeAway Lead”).”
• Off-Platform Booking: “A booking will be regarded as having originated from the HomeAway Network where PM receives through the HomeAway Network an inquiry, booking request, or other contact from or on behalf of a traveler about a Listing (each, a “HomeAway Lead”), and then, as a result of and within 30 days of the HomeAway Lead, PM completes a booking for that Listing directly with the traveler or traveler’s representative, e.g., by telephone or e-mail (each, an ‘Off-Platform Booking’).”

1. Expanded Off-Platform Booking Definition

The new agreement expands the definition of off-platform bookings. The agreement states, “should PM receive a HomeAway Lead about a Listing that is or becomes unavailable for the traveler’s requested dates, and then within 30 days of that HomeAway Lead executes a booking with the traveler for another PM property that comprises the same or similar dates and destination—regardless of whether PM advertises the substitute property on the HomeAway Network—the Company will be entitled to a commission or Off-Platform Booking fee on the total amount charged for the booking of the substitute property.”

2. Reporting Requirement

Additionally, the updated agreement includes new reporting requirements. The agreement states, “It is the sole responsibility of PM to ensure proper reporting of all Off-Platform Bookings to HomeAway, and to transmit such reporting through the Integration, via the Booking Update Service (“BUS”). However, such reporting is subject to review and audit, and if the Company (HomeAway) finds that a certain booking of a Listing originated on the HomeAway Network but was not properly reported as attributable to a HomeAway Lead under the above analysis, then the Company will notify PM of such discrepancy, and will be entitled to assess a commission or Off-Platform Booking fee on the amount charged for such stay unless PM provides reasonable evidence to the contrary.

3. Consent to HomeAway Audits

According to reports from PMs, HomeAway’s auditing requirement is particularly disturbing. The agreement says, “HomeAway may conduct an audit from time to time as it reasonably deems necessary to assess PM’s performance and fulfillment of its obligations under this Agreement. PM will cooperate with the Company (HomeAway) with respect to any such audit, and will provide the Company with access to books and records of accounts, PM Software and related system information, and other information associated with the Listings and the Performance & Activity Reports, as HomeAway may reasonably request for the purpose of verifying proper reporting and payment of commissions and fees.”

A HomeAway spokesperson verified that this new listing agreement is current and clarified, “These terms and conditions are not specific to subscriptions and/or off-platform bookings. They are general for all types of listings, all scenarios. The terms are therefore inclusive of integrated property managers who list via subscription and have off-platform bookings but not exclusive to them.”

He added, “HomeAway has always had the right to audit. It is not new with this agreement.”

The Impact to the Vacation Rental Industry

“The new listing agreement released this week reveals a continuing presumption by HomeAway leaders that they ‘own’ travelers, and therefore they do not have the responsibility to compete for the loyalty of those consumers perpetually,” said Randy Hall, founder and CEO of Liquid Life Vacation Rentals in Orange Beach, Alabama. “The word entitled is used repeatedly in the agreement describing HomeAway’s perspective about charging a match-back fee to property managers. The new agreement also included significant language describing HomeAway’s ‘rights’ to ‘audit’ and ‘authorization to charge’ the property manager’s credit card on file.”

Hall added, “Travelers will eventually agree with property managers that they have a choice, and they don’t really want to be ‘owned’ by an ‘entitled’ HomeAway.”

PMs who fall under the HomeAway-defined category of “integrated property managers” argue that the new policies demonstrate inequitable treatment by the company, asserting they they are being treated unfairly in comparison to other rental home suppliers using the HomeAway network.

However, Expedia executives know that, in the United States, a significant number of integrated property managers, including the new set of fast-growing multi-destination management companies, are undeniably reliant on the bookings that come from HomeAway.

In contrast, legacy property managers who built their businesses before the emergence of HomeAway are far less reliant on HomeAway for bookings. Industry observers are watching these legacy PMs closely to see if HomeAway’s new requirements will result in a material loss of inventory for the company. If legacy PMs agree to the new terms giving HomeAway this increased control over their businesses, it will indicate a considerable shift in the vacation rental marketplace, potentially giving OTAs a blank check as they move forward with their vacation rental road maps.