Recent HomeAway - VRBO 2019 Payment Policy Changes Anger and Confuse Vacation Rental Owners

Aug 21, 2019

Recently the Expedia Group - (HomeAway - VRBO) announced to vacation rental property owners listed on their online travel agency platforms changes to their payment policy effective immediately. This coincided with Yapstone Inc. ( notifications, whom process payments for HomeAway and VRBO which have created a ton of confusion and thrown vacation rental homeowners into shock and frenzy causing the HomeAway Company to receive floods of customer service phone calls resulting in extended delays as reported on their website.

The Background Story

HomeAway and VRBO (both companies owned by Expedia Group Inc.) have been using Yapstone Inc. (, a payment processing service provider, to process credit card payments such as Visa, Mastercard and American Express for reservations made on their vacation rental platform. According to HomeAway, "The vast majority of HomeAway customers enrolled in HomeAway Payments are powered by VacationRentPayment (Yaptsone Inc); while certain customers are also powered by Payoneer" depending on the country of origin.

Yapstone Inc. charges a 3% transaction fee to homeowners for any domestic transactions. This fee increases an additional 2% for any international transactions outside the United States. Although we don't have access to the contract between HomeAway - VRBO and Yapstone Inc. we can safely assume that there are additional financial benefits to HomeAway - VRBO from each transaction processed.

What are Yaptsone Inc.'s Advanced/ Early payouts for Vacation Rental Reservations?

Yapstone Inc. (VacationRentPayment) offers what they call an "Advanced Pay" option to "eligible" vacation rental owners. Yapstone Inc has changed its terms with HomeAway partners and no longer offers this service for "free", even though they charge 3% for each transaction. Confusing... we know! Read on as we explore the options. You can read the full HomeAway Payments Yaptsone's Advanced Payments FAQ page here

According to Yaptsone Inc., "Advanced Pay" will disburse funds 1 business day after traveler payment is made. They also indicate that the "funds should be available in bank accounts 5-7 business days or later". At the time of publication, we were unable to find out the "eligibility requirements to upgrade an account so that disbursement dates will not change". The company cited that "regular customer profile reviews will occur to determine the eligibility for upgrades to Advanced Pay. Vacation rental homeowners and property managers will apparently be notified by email of their eligibility leading anxious owners to wait and see when their cash flows will recover if at all.

The Cost of Yapstone Inc's Advanced Payment option for HomeAway - VRBO subscribers.

What are the Advanced Payment fees for HomeAway - VRBO subscribers? "Advanced Payments" from Yapstone Inc. service fees are not included in the HomeAway subscription fee. The 3% transaction fee for each payment processed does not cover the Advanced Payment option. "Yapstone has created a low fee of an additional 3% (6% total), for the Advanced Payments service for all HomeAway customers who Opt-In to the new Advanced Payments." So in essence, for subscribers to get their payment promptly instead of waiting until the Guest Check-in Date, they will have to pay a hefty 6% fee in total. 

Example of Increased Fees to Typical Florida Vacation Rental Property Owners using the Annual Subscription Model:

Homeowners: For a homeowner with a traditional annual subscription membership and depending on a short-term vacation rental owners gross income the increase of another 3% on top of the 3% credit card processing terms that they already pay could be significant. The 2017 average homeowners income was reported at $28,000 according to HomeAway. The average homeowner could experience a fee increase of anywhere from $840 and upwards to a colossal $4,500 annually for higher-income homes. 

Property Managers: Take that data and use it towards property managers and this strategy could be the end to their profit margins. For example; Using the data in the chart below a property manager with 100 homes could bear the brunt of an additional $84,000 to $450,000 for high income-producing homes. This, of course, depends on the spectrum of where their income falls.

Example of Increased Fees to Typical Florida Vacation Rental Property Owners using the Pay Per Booking (5%) Model:

Looking at the data in the chart below, the total fees column paid by the homeowner and property manager increases even more than a subscription model member. Using the 5% Pay Per Booking Model the total fees range from $3,080 for the average income property up to a whopping $16,500 in total fees for a higher income property. Ouch!

The New Yapstone Payment Schedule Fallout for Vacation Rental Homeowners and Property Managers

Any current and outstanding payment terms set out by the homeowners own policies, for example, a 25% down payment and remaining balance due within 30 days of Check-in, will now be paid out on the new policy terms dictated by the HomeAway Payment platform (Yaptsone Inc.). According to Yapstone Inc. "any payments received by Yapstone (including second installments of a booked transactions) on the free Advanced Payments service will be processed under Yapstone’s Check-In Payment service unless you qualify for – and opt-in to – the new fee-based Advanced Payments" at an additional 3% cost per transaction. "If you do not opt-in, you will receive the payment (second installment) shortly after your Guest checks in instead of shortly after Yapstone receives it.  If, however, you qualify for the new fee-based Advanced Payments service and opt-in to it before the check-in occurs, the second payment would be accelerated under the new service." 

Even Worse News for Property Owners Who Decide to Go Ahead and Opt-In for Advanced Payments with Yapstone Inc:
According to Yapstone Inc. "Payments made more than 12 months in advance of the check-in date are not eligible for Advanced Payments. These payments will be sent to your account after the guest checks-in." For homeowners who book high season a year or more in advance, this is more devastating news whereby the Advanced Payments option doesn't even apply.

Creating a Cash Flow Shortage for Vacation Rental Owners

Homeowners rely heavily on reservation funds being released at the time of booking. Many rental's operating costs such as a mortgage, utilities, property taxes and other expenses throughout the year can average up to 75% of the total gross income or even higher. Heading into the low season in Florida from mid-August to mid-December, some homeowners will have virtually no cash flow arriving with the lack of on-time reservation payments even if they take bookings for the high season now. This will put a severe financial strain on some homeowners and worst-case scenario loss of homes for others.

What's HomeAway Doing About Yaptsone Inc's New Payment Policy?

According to their recent HomeAway Community notification Created on Aug 20, 2019 at 10:45 PM;

"Vrbo and Expedia Group have built an upgraded payment option for you. We have been rolling out this new payment platform over the past year, and have over 500,000 vacation rental owners, using it. Given the news from Yapstone, we’re accelerating rolling out this feature to eligible partners as quickly as possible. In the next 24 hours, you’ll receive an email letting you know if and when you’ll be invited into the early payment program. Currently, the early payout program will be offered at no additional cost." 

Partners who move to the Vrbo payment option will get access to:

  • A flat 3% processing fee and no surcharges
  • World-class fraud prevention
  • Expert 24/7 support from our team with no transfers to third parties
  • New reporting tools that make tracking payouts easier

HomeAway - VRBO In-House Payment Processors will charge a flat 3% Transaction Fee... for now

HomeAway, like Yapstone, will charge the vacation rental homeowner a 3% transaction fee on the entire payment amount (rent, cleaning fees, admin fees, tax, insurance, rental damage deposit) for all payments processed on their platform. If you read the details on their communication above, they are "currently offering this early payment program at no additional cost" which leaves the door wide open to charge for this option in the future.

What strikes this author as funny is the name of the program "Early Payment", which is really a misnomer as funds are collected from the traveler and remitted 1 - 7 business days after collection... as far as I can tell this is actually a payment that is up-to-date... not early.

How HomeAway will Benefit from taking over the Payment Processing from Yaptsone Inc

Credit card companies charge larger payment processors, such as Yapstone Inc, HomeAway, VRBO, etc... a processing fee for each credit card transaction. Companies who process a large number of transactions can be negotiated to 1.24% or lower with each credit card company (Visa, Mastercard, American Express, etc....). The processor, in this case, HomeAway - VRBO then charges the vacation rental homeowners a higher fee than they are paying to the credit card companies. The difference between what they (HomeAway - VRBO) pay and what they charge the property owners is more income for the company.

This strategic move will be good for HomeAway - VRBO (Expedia Group Inc) stockholders who have been experiencing a declining performance with their shares falling for the second straight quarter as of May 2019. Read the full article here.

Where Does the Confusion Come In?

On August 19, 2019 HomeAway began its beta testing and the initial phase of their new In-House payment platform to a limited number of homeowners in the U.S. Some homeowners were invited into the new in-house payment platform with an email regarding an "Early Payout" invitation. However, at the same time pop up boxes appeared in accounts that were not invited, to "upgrade payments," with no mention of "early payouts" nor any explanation of what the upgrade was on the pop-up box. This has led to homeowner confusion and panic and HomeAway has not provided a satisfactory explanation of the difference. Homeowners are struggling to understand what payment system they are currently on and what they need to do to protect their investments.

At the same time on August 19, 2019, Yapstone Inc. sent out emails to notify users that they have canceled their free "Advanced Payments." whereby they are offering two choices:

  1. Opt into their new terms for"Advanced Payments" and pay an additional 3% on transaction fees (6% total), or;
  2. Do not opt-in and wait until the guests check in to receive payments which will be released then.

How did it end up this discombobulated?

As a result of Yapstone's move, HomeAway has stated they're "accelerating rolling out this feature to eligible partners as quickly as possible." They also state "Currently, the early payout program will be offered at no additional cost", meaning they are at least entertaining the idea of charging additional fees for these so-called "Early Payouts" in the future similar to Yapstone Inc's move. One is led to the conclusion that Yapstone Inc and HomeAway - VRBO are battling it out to grab more money from vacation rental owners. HomeAway by taking over the payment processing and Yapstone Inc by changing their terms and holding payments until Check-in dates, as well as the opt-in for the extra 3% Advance Pay option. 

The latest information from HomeAway is that the migration to their HomeAway In-House Payment processor could take anywhere between 45 - 90 days for homeowners to qualify for. This is leading many vacation rental property owners scrambling for strategies to avoid future bookings on HomeAway - VRBO and trying to find ways to get their traveler payments in a timely manner instead of after check-in dates.

Alternative Options for Vacation Rental Owners

The lack of information and control over their booking and payment processes have angered and confused many short-term property owners and managers. The recent changes brought about by Yaptsone Inc payment terms and HomeAway's notification to their customers has led to speculation that more charges to homeowners could be imminent. Is this the final nail in the coffin for HomeAway and VRBO for property owners? Have the recent increases in traveler fees, communication blocks, the push towards instant booking and now the payment term changes alienated their clients, the homeowners and property managers enough to start looking for alternatives?

The marketplace is opening up for independents and regional listing websites. HomeAway, VRBO, and Airbnb have created a void in the industry where owners long for the days of actually talking with their guests on the phone prior to booking. Finding a listing website that provides them with their ideal advertising platform where a fair and reasonable monetary exchange is possible. Homeowners and property managers can look to alternative booking sites who offer No Fee Direct Booking throughout the world and within smaller regions as a viable alternative with models such as annual subscriptions or pay per booking models. Read our article about Alternative Booking websites here.

If you have a vacation rental property in the state of Florida, you can list your property on FLARBO - Florida Rental By Owners a No Traveler Fee - Direct Booking advertising platform built "By Owners For Owners". We are one of the premier state-wide vacation rental listing sites that allow our property owners full control of the reservation cycle on their own booking software. If you don't have your own software for direct payment processing contact us. We would be happy to make recommendations to our trusted industry partners to help you get started on your journey towards independence and putting more money in your pocket. At FLARBO we believe in a fair and viable marketplace for vacation rental owners, property managers, and travelers.