Balancing Act: The Decision Process of Charging Guests for Damages in Your Vacation Home

Introduction: Owning a vacation rental comes with its joys and challenges, and one of the trickier aspects hosts often grapple with is whether to charge guests for broken, dirty, or missing items after their departure. This decision involves a delicate balancing act, considering various factors to determine the best course of action. In this blog, we’ll delve into the tradeoffs and decision-making process, exploring key considerations that can help you navigate this challenging aspect of property management.

1. Cost of Doing Business or Normal Wear and Tear:

  • Perspective: Consider whether the issue at hand is a routine cost of doing business or falls under normal wear and tear. Some wear and tear is expected over time, and charging guests for minor issues might not be worth the potential repercussions.

2. The Cost vs. Potential Bad Review:

  • Evaluation: Assess the cost of replacing or fixing the item against the potential impact of a negative review. Sometimes, the cost might not justify the potential damage to your property’s reputation.
  • Long-Term Perspective: While it’s essential to maintain the quality of your vacation home, the long-term benefits of positive reviews may outweigh the immediate cost of replacing a particular item.

3. Guest Transparency and Responsibility:

  • Disclosure: Did the guest disclose the issue, or did you discover it after their departure? Transparent communication from the guest helps establish the type of person they are and the amount of responsibility they will likely take.
  • Responsibility: Evaluate whether the guest takes responsibility for the issue. A guest who acknowledges and apologizes for the problem might be more understanding during the resolution process.
  • Responsibility and transparency can lead to two very different decisions on your part.  One might be that you appreciate the guest pointing it out, they paid a lot of money to stay in the home, and the issue is so minor that you will let them know you will absorb the cost.  This will leave a very positive impression with this guest and this is the type of guest that you will likely want back.  On the other hand, this guest might be very easy to collect from.
  • The Flipside:  The guest that discloses nothing or states it was there before they arrived will be the more challenging one.   When approaching one of these guests, you are likely to get into a disagreement and this is the one that you will more likely get a poor review from or will bring up other matters, if you pursue.  The best advice here is to assume this will not go well and make a decision before your pursuit about the value of pursuing vs. the challenges, time sink and poor reviews.

4. Establishing Timeline and Cause:

  • Before vs. After Arrival: Consider whether you are certain that the item was not damaged or missing before the guest’s arrival. If the guests claims the issue was there before they arrived, you need to make sure you know otherwise before pursuing.
  • Hidden Damage: If the guest attempted to hide the damage or was not forthcoming about it, this can impact your decision on whether to charge for the issue.  This is the type of guest we would love to charge and we feel an obligation to do in the spirit of the greater good for the vacation rental market, but this will likely be a challenging pursuit so be prepared.

5. The Role of Listing Channels and Security Deposits:

  • Listing Channels: Be aware of the policies of the listing channels through which the booking was made. Platforms like Airbnb may have a bias toward guests, making the resolution process more challenging for hosts.  You will be asked for photos, invoices and “proof”, some of which may be hard to provide.  You will end up on the phone or on email many times with many different people before it is resolved.  It can be a very frustrating process.  We find VRBO is a little better than Airbnb but also very challenging.
  • Security Deposits: If you have a separate security deposit under your control, weigh the benefits of using this deposit versus pursuing a claim through the booking platform. Having control over the deposit can simplify the resolution process significantly.   We use the OwnerRez channel management platform that allows us to take deposits of $1000 to $2000 for a stay independent of the channel.  The only recourse for the guest is to contact the credit card company and challenge the charge.  We find most will not do that if you are reasonable.  If they do, our experience is that credit card companies tend to be easier to deal with than Airbnb.

Minimizing Issues and Proactive Strategies:

  • Here to Help: At Shasta Lakeshore Retreat and Vacations 4 Rent, we understand the complexities of vacation rental management. Our expertise allows us to assist you in implementing proactive strategies and processes that can minimize potential conflicts with guests.

Conclusion: The decision to pursue and charge guests for damages in your vacation home is multifaceted, requiring hosts to carefully consider various factors. Is it a cost of doing business, or is it a significant issue that warrants charging the guest? Is the potential bad review worth the cost of replacement? These questions, along with evaluating guest transparency, responsibility, and the role of listing channels, play a crucial role in finding the right balance. At Shasta Lakeshore Retreat and Vacations 4 Rent, we not only understand the complexities but can also provide guidance and support to minimize these issues in the first place. Whether you’re facing this decision for the first time or seeking strategies to enhance your property management approach, we’re here to ensure your journey as a vacation rental host is as smooth as possible.

November 25, 2023

David & Lori Raun
Vacations 4 Rent
& Shasta Lakeshore Retreat
Lori:  Cell/Text:  (925) 200-6934

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