Generating bookings for a holiday let property can be done one of two ways; through a marketing agency or taking the bookings yourself. The functions carried out by an agency typically cover:

• Promoting the property via online and offline channels.
• Answering booking enquiries.
• Taking bookings.
• Taking payment – deposits and balances.
• Arranging paperwork for the booking and dealing with issues and complaints.
• Sometimes arranging cleaning and other property management.

So with this in mind we can explore the pros and cons of using a holiday lettings agency versus doing it yourself.

The Disadvantages.

Commission and income.

An agency will obviously incur a charge which is normally a percentage of the booking value. This can range from anything between 15 and 30% depending on the agency and the service they provide.

The question of how much income can be earned from the property versus the DIY approach, and how many bookings they can generate, is not a simple case of black and white. Rather it depends on the quality of the agency and the ability of the owner to deliver bookings.

Control.

Using a lettings agency will require you to adhere to their portfolio-wide policies which may not necessarily be most appropriate for you property. Examples include:

How much the deposit is, which can range from 10% to 50% of the full price, or be a flat rate amount like £50 or £100.

When the balance is due – 4 weeks before arrival or 8 weeks for example.

Their policy on damage deposits.

Their policy on extra charges, such as an extra charge for pets to cover cleaning, or for the supply of baby equipment.

Their policy on changeover dates and short breaks. The changeover date may be restricted to a Friday or Saturday for example or flexible. The agency may also have a policy on when short breaks are allowed which could affect income and occupancy.

Though policies are well thought and there for a reason, they can sometimes be at odds with the preferences of the owner.

Cashflow.

This varies from agency to agency, where some will pay a proportion of a booking when they receive the money, while other will only release money after the guest departs. For example if a guest books a holiday in January, to stay in August at £1000 and pays a 1/3 deposit, that £333 could sit in the agency’s bank account for 8 months until after the stay has taken place before it is transferred to the owner. Even when the balance is paid, say 4 weeks before arrival, the money would sit in the agency’s account for up to 2-3 months, depending on their policy.

Lost in a crowd.

A lettings agency with many properties may not proactively monitor occupancy per property and there is the risk that key booking periods, such as Easter or Half Term are unoccupied. If monitoring takes place it could be possible to be pro-active to ensure a booking.

Competition.

Being part of an agency’s portfolio means you are in competition with other similar properties on their books which can be quickly and easily compared on their website.

The personal touch.

Handling booking enquiries can be best handled by someone who has visited and is familiar with the property. Unless the bookings staff in the agency have visited the property, this is always more likely to be the owner who can provide a more helpful response and therefore increase the chances of achieving a booking.

More bookings and income.

This is also listed as an advantage of using an agency but ultimately is down the competence of the agency and the owner.

Read our article about the advantages of using a holiday lettings agency.