Big online rental booking sites like Airbnb, VRBO, HomeAway, TripAdvisor, and Expedia let you rent a home, a condo, an apartment, or even a palace wherever you want to travel, giving you a much more local experience than if you had rented a stuffy hotel room. These sites make renting fast, easy, and convenient, but is there a hidden cost that you might not be aware of?
The answer is YES!
What That Service Fee Really Means
These online sites need to make money, which means that they can’t just charge you a normal room rate like a hotel or like a vacation property manager (like Ali’i Resorts). After all, the room rate goes to the property owner, so how does Airbnb and other sites like it stay in business? They do it in two ways. The first is by charging YOU, the guest, a service fee. On Airbnb, this can range from 5- 15% of the total of your booking cost.
Think about what that means. If you were to rent a nice condo for your family for $400 a night for 7 nights, your cost would be $2,800 before fees and taxes. A service fee of 15% on that rental would add $420 to your bill. That’s a lot!
Why Owners Are Probably Charging You More
The second way that online travel sites earn money is by extracting a commission payment from property owners every time their property is booked. This fee is typically 3 – 5% of the property rental rate. If you think that a typical property owner is just going to swallow this cost, think again! Why do that when they can just increase the cost of their unit and pass that fee onto you?
Why You Can Save Hundreds When You Deal Directly with Property Managers
Here’s where things get a little crazy. Many online rental sites let property managers list their properties. Now there are three people in the equation. The property owner will get the lion’s share of the rental rate, but now both the property manager and the online travel site need to make money too. That means that the property manager is likely to increase the price they list for a property so that they can take their cut. The higher the property price, the higher the service fee, because it is based on a percentage of the rental rate.
If you were to just go and rent directly from the property managers, you could eliminate that service fee altogether. In the case of the Maui condo we described above, you could save over $400. That money could easily cover whale watching or snorkeling for a family of four or your meals for an entire day!
At Ali’i Resorts, we directly represent our property owners, so you won’t be on the hook for a big service fee on top of your rental rate just to pay off the online rental site. We do charge a service fee, but it is only to cover WiFi, parking, property, and cleaning costs.
Save money by going direct. Our website is super easy to use, and we offer beautiful, excellent properties throughout Wailea, Makena, Kihei, and Honokowai in Maui.