What’s Included in a Holiday Letting Agency’s Commission?

Posted by Linda Maclaughlan on 20 March 2018

Are you feeling curious about exactly what you’re paying for when hiring a holiday letting agent?

If you’re paying between 18 – 25% commission, with potentially extra fees on top of that for property management, you’ll probably want to know what should be included for those fees.

Every holiday letting agency is a little different – and some will even be able to tailor their services to suit your needs. (For example, maybe you need help with the bookings side and some aspects of property management like cleaning or laundry)

I’ve been helping people with their own holiday lets for many years now (and I love what I do), which is why I’m going to tell you what you should check will be included in your holiday letting agent’s commission (although you might want to do some of it yourself), below.

But first…

What are letting agents not telling you?

A lot of owners need specific services, and there tends to be a lot of confusion as to what they’re actually paying for; not helped by the fact that many agencies are often very reluctant to give out information.

I have a hard time understanding why.

For instance, someone has just given me a call to say that one of the larger agencies would only given them a cost breakdown for additional services once they’d signed up!

Some holiday let owners are also unaware of tie-ins, and things like owner booking charges. One example is Scottish Cottages, who give you a lower commission rate if you only have a set amount of owner bookings.

My point is that it’s a real minefield, and they’re under real pressure from Booking.com, AirBnB etc. – the fact that Scottish Cottages now advertise on Booking.com kind of says it all, doesn’t it?

The lack of information is the main issue here. In my opinion, it’s so important that agencies are upfront and honest about what they are charging, so owners can make an informed choice – the right choice for them.

1. Bookings/advertising

I’m starting with the most obvious thing on the list here, because bookings and advertising is the very least I’d expect from a holiday letting agency. But you also need to find out exactly what this includes.

For instance, will they get the guests in and out of the property and handle everything from bookings to payments? What about guest liaison? It’s vital to check they won’t just pass the buck if guests have a problem – which unfortunately is something I hear about a lot.

Will they deal with customer complaints? And how about arrival days? It still makes me despair when I see set arrival days – this is not what people want. The days of Saturday-Saturday changeovers are long gone. Guests prefer flexibility.

2. Changeovers (i.e. cleaning/laundry)

Not all agencies will be able to do this, but some will. Many holiday let owners need help dealing with all aspects of the changeover to ensure that any issues with guests are dealt with promptly – this includes things like cleaning and laundry, but also other issues that may occur.

Guests are human just like the rest of us, so they’ll understand when, for instance, your boiler breaks down. However, they won’t understand when they’re left with no solution to their problem. This is someone’s holiday, so it’s important to deal with these issues immediately.

Just imagine that they’ve saved up all year for this much-needed break, and it needs to be perfect – they’ve put you in charge of creating memories for all of the right reasons!

3. Maintenance

If you have an agency who provides you with property management, this may also cover things like maintenance. For instance, if you need your annual boiler service booked, or the gutters cleaned, they should be able to organise for this to be taken care of right away.

This may be included in a property management package, or it could cost you extra, depending on the agency you go for.

4. Welcome baskets

It’s important for your guests to get a proper welcome, and one of the best ways to do this is to provide them with a lovely welcome basket full of enticing local goodies – and a few essentials for their stay (like milk in the bridge). Even some flowers won’t go amiss.

Unfortunately, most agencies won’t do this. I was shocked recently when I visited a new holiday let owner and she was told by a certain agency “not to bother” with welcome baskets. They’re wrong.

One of the most vital things you can do for guests, after providing a spotlessly clean, well-maintained and safe property, is to go that extra mile and make them feel welcome. Nothing can compare to that feeling they’ll get when they first walk in.

The reality is that agencies would rather tell people not to bother because it’s inconvenient for them – meaning they don’t care as much about guests’ experience as they do about earning money. One word; priorities.

5. Safety/regulations

One thing you absolutely have to stay on top of when running a holiday let, is the changes in regulations that can otherwise take you off-guard. But make no bones about it, if you don’t adhere to these regulations, you’ll be breaking the law.

I am absolutely shocked at times when asked to visit a property only to find the basic safety regulations aren’t even met.

Whilst the legislation around holiday lets can seem a little grey, why would you not want to afford guests who are very unfamiliar with the property the same level of safety as long-term tenants who are more familiar?

It totally amazes me that I still get people contacting me to ask things like: “But is it the law? Do I really have to do it? What about the costs?” — I mean, really?

For the sake of a few pounds, are you really telling me you won’t sleep better knowing you’ve done everything to ensure your guests’ safety? It’s down to you; no-one else.

Advice from an experienced holiday letting agent

As we’ve previously said, agency costs can be quite expensive compared to taking on bookings yourself. However, I appreciate that for a variety of reasons, people are unwilling or unable to do this (for instance, you might have a job, another business, or be in another country!

The best advice I can give you is not to just go with the first agency you find. Instead, do some research online – just be prepared that the actual information you need is scarce, and for whatever reason, agencies refuse to tell you their costs upfront.

As I mentioned above, some of them even expect you to sign up before they tell you! (Unbelievable, I know)

Please take care when agencies give you a price for a weekly holiday let i.e. what you can expect to earn. I’ve had some shocking examples recently, and I was asked to visit someone who had signed up with one of the top agencies but had very little bookings.

Asking my advice, I said that in all honesty, their price was far too high. This was the price the agency had set. In response, he told me: “Well, you’re the first person to be honest and say that.”

He then told me he’d spoken to the agency and they advised he reduce it by 25% to get a booking. 25%! That’s quite a good chunk of money. So, just what was the point of that over-inflated price? Basically to get him to go with them, as he thought he’d make more.

Do your own research as to what the price in the area is, and remember guests will be much happier overall with a property they feel was value for money than one where they feel they’ve paid over the odds. In the end, people just want what’s fair.

One of the key review scores with, for example, Booking.com is “value for money”.

And when you’ve found an agency you’re happy with? Just remember that bookings can take time to come in, and just because you’ve bought a cottage and furnished it doesn’t mean you’ll instantly have a fully booked calendar!

Conclusion

I hope this blog has helped to shed a bit more light on the things that should be included in a holiday letting agent’s commission.

Remember, do your own research whenever you can. It’s all at your fingertips – just a quick Google search will bring up plenty of results, including different agencies, prices and tips/advice! If possible, don’t get yourself tied into one agency, and be wary of signing on fees, too.

Do you have any more specific questions about agency commission? Feel free to drop me a comment below – or get in touch with me directly. I’ll be happy to help!

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