HomeAway Should Face Traveler Fees Class Action, Plaintiffs Say

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Vacation rental marketplace HomeAway shouldn’t be able to getaway from a proposed class action lawsuit alleging it used bait and switch tactics to charge traveler fees, property owners say.

Challenging HomeAway’s motion to dismiss the case, lead plaintiff Theadore Kirkpatrick says the online vacation marketplace made false promises to property owners when it said it would never impose fees to travelers.

“Among other assurances, HomeAway unambiguously promised that it would ‘never charge a fee’ to travelers,” Kirkpatrick asserts in a memo opposing HomeAway’s motion to dismiss the lawsuit. “While HomeAway’s brief overlooks these promises, it was these assurances that enticed property owners — like plaintiffs and class members — to select and pay HomeAway as their rental property subscription provider.”

However, according to Kirkpatrick, the rug was pulled out from under property owners in a classic bait and switch fashion as HomeAway did what it promised it would never do.

In early February 2016, HomeAway “unilaterally” introduced and instituted traveler fees during its contracts with property owners that were not in effect at the time they purchased or renewed their subscriptions.

“Upon this implementation of the traveler service fee, potential vacation-goers experienced sticker-shock as budget-friendly rental options drastically spiked in price due to additional fees that ranged from 4-10% of the actual rental rate. Plaintiffs and Class members saw their bookings and rental income dramatically decline thereafter as a result of these new traveler fees,” Kirkpatrick claims.

According to the opposition brief, the plaintiffs do not oppose dismissal of their claim for breach of the duty of good faith and fair dealing, and do not dispute the application of Texas law to all of their claims. They do, however, oppose dismissal of claims relating to breach of contract, common law fraud, unjust enrichment, and violation of Texas Deceptive Trade Practices Act.

In their amended complaint, they maintain that HomeAway did not have the contractual right to impose these new traveler fees and that the company’s promises of always being free to travelers was not true when made, and were part of a fraudulent bait and switch ploy.

HomeAway filed a motion to dismiss the proposed class action lawsuit in December, saying the plaintiffs failed to allege that the company’s promise that its services would always be free to travelers was false when made.

“Plaintiffs claim HomeAway breached its contract with them but fail to and cannot identify any term of their contract that was breached,” HomeAway said. “Plaintiffs also allege fraud based on HomeAway’s advertisements and statements that its services were free to travelers, but plaintiffs fail to and cannot allege facts showing that any such statement was false when made.”

In order to list their vacation rentals on HomeAway’s websites, which include HomeAway.com, VRBO.com and VacationRentals.com, property owners pay either an annual subscription fee or use a pay-per-booking option. According to HomeAway’s motion to dismiss, all of the plaintiffs renewed their subscriptions prior to Feb. 9, 2016.

“In doing so, each of them agreed to one of three versions of HomeAway’s terms and conditions,” the company said. “On Feb. 9, 2016, consistent with its announcement three months earlier, HomeAway began to charge traveler fees ranging from 4 percent to 10 percent of the total price on bookings made through HomeAway’s website.”

But the property owners contend they had no reason to think HomeAway would ever start charging these traveler fees and had they known traveler fees would be imposed, they would not have renewed or purchased subscription agreements.

Another similar class action lawsuit filed in November also takes issue with HomeAway’s new policy of charging vacation bookers a traveler fee. Plaintiff James May of Oregon says that HomeAway and its parent company Expedia not only pulled a bait and switch on property listers but also claims property owners who allow renters to book online are given unfair preference in search result listings.

Kirkpatrick is represented by Michael Singley, Ketan U. Kharod, Benjamin F. Johns, Andrew W. Ferich and Stephanie E. Saunders of Chimicles & Tikellis LLP, Jasper D. Ward IV of Jones Ward PLC, and Robert Adhoot, Theodore W. Maya and Bradley K. King of Adhoot & Wolfson PC.

The HomeAway Bait and Switch Traveler Fees Class Action Lawsuit is Kirkpatrick, et al. v. HomeAway Inc., Case No. 1:16-cv-00733, in the U.S. District Court for the Western District of Texas, Austin Division.