HomeAway Class Action Claims Travelers’ Fees Violate Contract

A short-term rental property owner is suing the company behind VRBO.com, claiming she lost business after the company started charging travelers for it services.

Plaintiff Deirdre Seim alleges that HomeAway Inc. drove potential renters away when it started charging travelers for certain services offered on its websites HomeAway.com, VacationRentals.com and VRBO.com. Seim says HomeAway breached the terms and conditions she had agreed to by switching business models when they did.

The HomeAway network of websites constitutes the largest online market for vacation rental properties in the world, according to Seim. She says that in 2015, HomeAway’s websites listed about one million rental properties in 190 different countries. According to HomeAway’s website, over 35 million travelers have used HomeAway websites to find accommodations.

Seim says she’s been doing business through VRBO.com since 2011 and currently lists five rental properties on the site.

According to the plaintiff, one of the benefits of doing business with HomeAway used to be that the website charged no fees to travelers. Instead of charging travelers, Seim says, HomeAway’s revenue used to come from selling property owners a one-year subscription to list their properties on the websites.

Seim says this business model is what used to distinguish HomeAway websites from competitor sites like TripAdvisor and Airbnb. She says the company “consistently advertised and promoted that its websites were free to travelers, and would remain free to travelers pursuant to its marketplace model.”

Seim purchased her most recent set of subscriptions based on HomeAway’s assurance that they would not charge a fee to travelers, she says. The plaintiff further claims that she relied on the terms in her contract that stated HomeAway’s rates and fees would not change during the one-year term of the contract.

But in February 2016, HomeAway changed its business model to what Seim calls an “online travel agency” model. With that change, HomeAway began charging “service fees” to travelers for their use of the websites. Seim says the fees ranged from four to 10 percent of the total price of the rental property, adding up to hundreds of dollars in fees for each traveler.

With the imposition of those fees, Seim says, she and other HomeAway subscribers suffered a drop in business. She argues that HomeAway’s actions breached its contract with her and violated the consumer protection laws of several states.

Seim seeks to represent a Class of other plaintiffs in the U.S. who bought a subscription for a HomeAway website listing before Feb. 9, 2016.

She is asking the court to award damages covering her own losses and that would return to the plaintiffs all money wrongfully obtained by HomeAway, plus attorneys’ fees, court costs and interest. Seim also wants a court order barring HomeAway from continuing its alleged “unlawful, unfair and/or deceptive practices.”

The plaintiff is represented by Michael C. Singley of The Singley Law Firm PLLC; Ketan U. Kharod of the Kharod Law Firm PC; Jasper D. Ward IV, Alex C. Davis, and Ashton Smith of Jones Ward PLC; and Robert Ahdoot, Theodore W. Maya, and Bradley K. King of Ahdoot & Wolfson PC.

The HomeAway Travelers’ Fees Class Action Lawsuit is Seim v. HomeAway Inc., et al., Case No. 1:16-CV-00479, in the U.S. District Court for the Western District of Texas, Austin Division.