Character Cottages

Cotswold Homes Asks The Experts

"How Much Do You Really Pay To Market Your Holiday Home?"

I have just found out that my holiday letting agent is including a booking fee in the price guests are paying to book my property, however these fees are not on my monthly statement and the agent takes them for themselves. The agent has told me not to worry, as "the guest pays the booking fee", but I wonder if these fees are affecting my profits and if they are fair?

"When you sign up with a holiday letting agent they will typically discuss the prices and rental income that you can expect to achieve for your property, then quote a commission percentage for generating these bookings. What's less well known is that when a guest books your property, the agent or website often takes an initial fixed amount from the value for themselves, as well as taking their commission percentage on the remaining amount.

The fixed amount is typically referred to as a "booking fee" or an "administration fee", and is often only referred to in the detail of the agent's terms and conditions. Letting agents often say "Don't worry, the guest pays the booking fee, not you". In reality of course this is meaningless, as the guest is only interested in the total price of their holiday cottage, not in how this money gets split between you and your letting agent. This is best demonstrated by comparing the difference in the income you would generate from two identical properties, marketed via two different agents. Both agents charge a commission fee of 20%+VAT and agent B also charges a £30+VAT booking fee:


Assuming 55 bookings per annum, which is reasonable for the Cotswolds, the impact of using agent B is to reduce your profi ts by approximately £1,500. Alternatively, it is the same as paying a commission percentage of more than 26%+VAT. There is no doubt that if an agent or website asked for £1,500 as a fixed annual fee, or a commission percentage of 26%, no one would pay it, but by pretending that a booking fee is not a real cost to the owner, the agent is often able to get away with it.

Another impact of the booking fee is that it reduces agent B's incentive to try to maximise your letting income, as a signifi cant proportion of their income is only dependent upon the number of bookings they generate for you, not the value of these bookings. For these reasons, at Character Cottages we have never believed in the confusing and opaque practice of booking fees, we charge a fl at commission percentage and we work hard to maximise every owner's income and profits.

Assuming that the financial performance of your holiday home is an important consideration, it is vital to calculate the cost of any booking fees or other "hidden extras" levied by your letting agent or website on top of their commission percentage, and decide if this is an acceptable reduction to your profi t. If you are unhappy and would like to understand what other options may exist for you, then please just pick up the phone, or email us, using the contact details below.

Andrew Soye and Mat Faraday are both qualified Chartered Accountants and are the founders of Character Cottages, one of the leading luxury holiday letting businesses in the Cotswolds.

Telephone: 020 8935 5375 | Website: | Email: This email address is being protected from spambots. You need JavaScript enabled to view it. 

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