Questionable practice
sim
This article is not related to graphic design, web design or Mokso per-se, but I have the urge to write about this somewhere and get it off my chest.
I'm a director of a holiday rentals website called rentability.com. In brief, it's a self-catering holiday rental search engine with a difference. Instead of paying up-front for a years advertising of your rental (with no guarantee of any return), we say it's free to advertise but you pay a small fee for your first 50 enquiries/leads per year. This way we (as the service providers) have to effectively earn our annual fee of €100 lead by lead rather than, as an advertiser, paying it up-front not knowing what you're going to get. With Rentability if you don't get any leads, you don't pay anything.
This isn't about our site though, it's about the market leaders, or more correctly, the market leader - the Homeaway Group. They are a 'group' that have bought up nearly all of the existing successful rental listing sites - holiday-rentals.co.uk, cyberrentals.com, homeway.com, a1vacations.com and the original giant vrbo.com amongst others. The Homeaway Group own all of these sites.
That in itself is fine I guess, but as a rental property advertiser, what gets me is that I might have to pay this 'group' multiple times for what is effectively the same service. For example, I'd pay $249pa for a listing on VRBO, $329pa for a homeaway.com listing and £139pa for ownersdirect.co.uk. So for a single listing on just these 3 homeaway sites it's a total cost of nearly £785 with no guarantee of anything other than a presence on each site.
What I find questionable is that the same company (the Homeaway Group), supplying effectively the same service, are charging independently for each platform (you do get different deals for signing up from different sites like a 'basic listing' on a selection of their sites). It seems to me that this isn't altogether exactly proper. I have to question the morality of charging the same people multiple times for what is the same service (but I can't question the business sense).
Diagram of the HomeAway monopoly business model
I was trying to think of another example of this model happening in the world of business. Can anyone enlighten me - I'd be interested to hear about it.
Reader Comments (4)
I'm a keen supporter of Rentability, and its model for the holiday rental market, and this isn't the place to repeat my suggestions for improving its basic SEO - some omissions are fairly obvious for anyone involved in website design.
However the information on the HomeAway group above is highly inaccurate. A basic listing on HR UK is £139, and one gets a simple listing on 10 other sites, in multiple languages. Upgrades include full listings with translations into relevant languages (£139 each for US, French and German sites). The £25 translation price is high quality and a fraction of the cost from usual professional sourcs. Each site has a country specific domain, and is hosted in the relevant country - an important SEO advantage which works. Amalgamation would be highly detrimental and no-one would benefit.
All rates are negotiable and there are several unpublished discounts for multiple subscriptions.. The sites produce results. It's a model which works. The cost per booking is the lowest of any site we've used if one accepts what counts is bookings, not enquiries. I have no affiliation.
I second what Richard says, my experience is 90%+ occupancy through HA sites and that's worth the result. I'd consider advertising with someone else but only if it was free.
I see that you get a good return from your HR UK presence Richard, and you too Bob, and that's really good news for you guys, but I suggest that this may not be the same for everybody.
I know, only too well through my experience with Rentability, that successful advertising for a vacation rental advertiser means bookings. It's the currency of the VR world - it's all that matters.
Can I put it in this simplistic way without getting into the detail of specific packages - let's say HR UK didn't bring all the bookings you needed, maybe just 1 or 2. You're probably then in the position of having to advertise with other HA group sites to achieve more occupancy in your rental. So on the face of it you've paid them once, they didn't deliver, so you then pay them again in the hope that this time they will deliver, and so it goes (good deal for them).
At Rentability we have to earn our fees lead by lead. I realize leads are not bookings, but leads lead to bookings and we have a ceiling on our charges. Now that the technology to trade in this performance based way exists, how can a company really justify doing it any other way?
Thanks for sharing this informative post.