OTAs - what You need to know as a Cape May REntal Owner

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You fell in love with the Victorian streets of Cape May. You enjoyed the sun and the surf on Cape May's beaches. You shopped on Washington Street. You dined in one of Cape May's many restaurants. You watched the sunset on Sunset Beach.

You decided that this was the place you needed to buy a second home. You already know that Cape May is the Jewel of the Jersey Shore and you want to welcome the next generation of tourists to discover its charm. So you decide to rent your Cape May Vacation Home, Maybe you already are. 

The first place you probably researched is an Online Travel Agency, or OTA for short. You know these companies. You may have even used them on your own vacations. You see their ads on TV, especially around certain really big football games. These companies dominate your search results.

OTAs claim they are vacation rental listing companies, but they are essentially marketing companies. These listing sites invest heavily in advertising, both on TV and online. They want to be the first result you find when you are looking to either rent your home or vacation elsewhere.

One thing they do extremely well is make it easy for you as an owner to list. With a few clicks, an upload of a few pictures,  and one brief description later, your listing is published and ready to rent! List your property with them, sit back, and enjoy the money that comes in! 

It's that simple, right? Maybe. But there is a good chance you might be making less than you should, and you might be pushed into policies that don't make sense in our local market.

With a short high summer season and NJ laws that tax OTA bookings, there are more than a few reasons those OTAs might not be the best place to list your Cape May rental home.

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The OTA sells itself as a valued partner to vacation rental homeowners. But is that truly the case?

Let's start by following the money. Money always talks.

Tenants pay an additional  6-15% directly to the OTA on every booking. In the example above, this amounted to $2,294, which was approximately 13-14% of the total booking cost.

Owners normally pay the OTA a commission or listing fee of 3-5% on every booking. In this case, that would be approximately $650.

Who's paying more? Or more importantly, who is worth more to the OTA's bottom line? 

We see this imbalance in situations where there might be disputes or issues between tenants and owners. There is a general feeling that OTAs tend to side more with tenants than with owners, which makes sense if they make much more from the tenants than from the owners. 

Locally, we often see two tenant-friendly policies pushed by the OTAs that could potentially harm you as an owner. One of these is Instant Book, and the other is cancellation policies.

The more tenants book, the more money the OTAs make. That's why OTAs want it to be as easy as possible for tenants to book your home - even if they might violate your policies, occupancy, or age restrictions. 

With Instant Book, owners cannot vet a tenant before booking. If you discover a reason to cancel the reservation, the OTA could punish you, your listing, or both. 

As for cancellations, OTAs want owners to offer tenant-friendly cancellation policies. They advise owners that this will lead to more bookings and happier tenants. We see this as an extremely risky stance for Cape May owners as our prime season is so short. 

It is extremely difficult to fill weeks due to last-minute cancellations. One or two cancellations could cause a huge financial impact.

The more you look at the relationship, the more you might see that owners are not as valued as tenants.

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Does that mean OTAs are bad?  No. It just might not make sense to be the pillar of your business.

Long & Foster values OTAs - we even use them as a source of tenant acquisition. OTAs are great at marketing, and we leverage that skill to help fill our owners' calendars.

While we spend the majority of our marketing efforts to have tenants book direct through us, we also understand the need to connect with new guests unfamiliar with the market.

That's why Long & Foster lists our owners' properties on an OTA at NO ADDITIONAL COST to them. 

When choosing a local Cape May agency to list with, the only answer that makes sense is Long & Foster. When it comes to Vacation Rentals, reach matters. Long & Foster has the largest reach among all the real estate agencies in Cape May.  

With offices throughout the Mid-Atlantic and Southern states, Long & Foster has local offices right where our tenants live. Potential tenants know our name and trust our brand. But our relationship with our owners is just as important as our reach. Our listing agreement is with the owner. 

We get paid when we produce. We earn our commission by connecting high-quality tenants for an owner's vacation rental. We make every attempt to vet potential tenants and we always give the owner the final say on all bookings. We never punish you for choosing to pass on a tenant who isn't the right fit for your home.

When it comes to cancellations, Long & Foster only offers a strict, non-refundable policy. It is extremely difficult to find tenants on short notice to fill canceled weeks. As a bonus, barring last-minute reservations, owners are paid out BEFORE the tenant's arrival.

We understand that owners have many choices when listing your Cape May vacation home.  Here are a few reasons why Kathleen Fitzpatrick might be the right agent for you.

She is a Vacation Rental expert and has the knowledge and know-how to help you maximize your Vacation Rental Investment. 

She offers a comprehensive pricing strategy, and periodic evaluations to ensure we are on track with bookings and earnings.  She lists your home on three websites to maximize exposure for your listing. 

She is constantly marketing her listings on multiple social media channels.  She has extensive email marketing experience and knows how to leverage L&F's  100k+ email subscriber list.

Most importantly, she is a trusted advisor, one who cares about the owner's vacation rental business goals, and who will work tirelessly to help achieve them.

If you rent your Cape May area home exclusively on an OTA and want to learn how you can potentially earn more, contact Kathleen. She can show you why adding Long & Foster and Cape May Stays to your team might make more sense than you think.

If you are currently listed with another Cape May agency and want to add Kathleen to your team, she's ready to join! Contact her today!

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