Save on hotels: rent a home for your vacation

The economy has been responsible for a surge in a particular kind of travel: vacation rentals as an affordable alternative to traditional hotels and resorts, with people who can't sell their second homes or condominiums renting them out, and travelers snapping them up. In this column, CBS News Travel Editor Peter Greenberg tells everything you need to know about this growing industry and what questions to ask before you rent.

Vacation rentals are hot: According to a 2009 study from Phocuswright, titled "Vacation Rental Marketplace: Poised for Change," vacation rentals represent a more than $24 billion opportunity in the U.S. -- that's more than one-fifth of all hotel room revenue and 8 percent of the total U.S. travel market.

According to research from HomeAway.com, vacation rentals cost, on average, 50 percent less per square foot than hotels.

And the good news for travelers this year? HomeAway reports that 59 percent of vacation rental owners wll keep their 2010 rental rates in place this year, and 10 percent will actually lower their rates.

Awareness of this option is increasing across the board. Recent studies have shown that about 20 percent of leisure travelers have stayed in a vacation home rental as an alternative to a traditional lodging, and 22 percent have stayed in a condominium resort.

Discover Vacation Homes, the awareness initiative of the Vacation Rental Managers Association, reports that, collectively, reservations for vacation rental managers across America are up nearly 12 percent over the next 6 months. HomeAway reports that 60 percent of vacation rental owners say their bookings for the first quarter of the year (January through March) are about the same or higher as last year (nearly 15 percent say higher)

Why vacation rentals?

Affordability is a huge draw, particularly for group travel. A home, villa or condo can generally fit more guests than a traditional hotel room, making it a great choice for family reunions, girlfriend getaways or special celebrations. Add in amenities like fully equipped kitchens to cook your own meals, game rooms, private pools/hot tubs, free Internet access, and you've got even more value for your travel dollars.

One of the best reasons to rent a home: the local experience. In a vacation rental, that can mean browsing farmers markets to make your own meals, getting tips from the owners on the best local restaurant recommendations, or getting access to community beaches and parks rather than the crowded tourist sites.

Tips Before You Rent

  • Travel during off-peak dates: For example, a four-bedroom, two-bedroom home in Martha's Vineyard that sleeps up to eight people is available for $2,900 if you travel June 1-June 30. Later in the summer, during peak season, that rate jumps up to $3,400 (July1-August 31). So travel earlier and save. http://www.homeaway.com/vacation-rental/p165607

    Meanwhile, near Yellowstone National Park, Jackson Hole Resort Lodging (www.jhrl.com) is offering 20 percent off early booking specials until May 1, along with a slew of "stay and play" packages that include activities and experiences in the rate.

  • Save by booking directly with the owner: The peer-to-peer rental site, VRBO.com, has a property on Amelia Island Plantation (http://www.vrbo.com/100671) that is less expensive than if you book a comparable condo through the Plantation's reservation service. This three-bedroom condo sleeps up to six people for $1,750-$1,800 per week (about $300 per person for the whole week). However, keep in mind that this price is for the condo only. You will have to pay an extra "amenity fee" of about $80 a night for access to certain activities, like Amelia Island Plantation's golf, tennis, kids clubs, and certain restaurants. However, according to the owner, 90 percent of his renters don't require this option. Weigh your options carefully and find out exactl what is, and isn't, included.
  • First-time renter? Consider a management company: The benefit of going with a managed service, rather than a direct-by-owner rental, is that you can have someone walk you through the process. Additionally, many management companies have several properties, so you can work with them to find the right one. For example, Florida's Emerald Coast, which includes Destin, Fort Walton Beach and Okaloosa Island, has more than 14,000 managed rooms to fit all budgets. Meanwhile, in North Carolina's Crystal Coast , Emerald Island Realty has more than 700 vacation-rental properties. In Orange Beach, Kaiser Realty is the oldest family-run vacation rental/real estate company on the Alabama Gulf Coast and has approximately 600 beach homes and condominiums.
  • Look for concierge services. Not everyone is cut out for a traditional vacation rental, especially if chocolates on the pillow are a must. But there is another option for those types of travelers. For example, California-based company called Beautiful Places (www.beautiful-places.com) has villa rentals throughout Napa/Sonoma, Nantucket and parts of Europe along with a full concierge service to arrange anything you need: stocked kitchen, tours and excursions, private meals, cooking lessons, you name it... And it's not necessarily for luxury travelers. One Sonoma, California property called Casa Sebastiani http://www.beautiful-places.com/winesearch/casa_sebastiani-2, complete with a full kitchen, pool and gardens overlooking a well-known winery, starts from $7,900 per week for up to 14 people. That breaks down to about $80 per person, per night.

How to protect yourself

The bottom line: Ask questions. Lots of them. You don't Vacation-rental expert Christine Karpinski ( www.HowToRentByOwner.com) shares her top tips before you rent:

-- Find out about the beds in the bedrooms. A three-bedroom home doesn't necessarily mean it can sleep six, or that each bed is a queen or king size.

-- Renters are generally not covered under homeowners insurance. Ask if your company has an insurance policy that will cover accidental damage.

-- Most vacation rentals are non-refundable. It is recommended that you purchase traveler's insurance in case of illness, weather delays, etc.

-- Insist on a phone conversation before booking. Owners don't want unhappy guests as much as travelers don't want a house that is not suited for them.

-- Bring the phone numbers for the owners in case of problems while you are there. Often they'll have someone on the ground that can rectify issues quickly.

-- Never assume. Things that are standard in U.S homes might not be available abroad (i.e. air conditioning, clothes dryers, etc.)

-- Ask when the photos were last taken. If the owner took the photos 10 years ago you might want to also ask when the last time things have been updated. Rentals, especially popular ones, can experience heavy wear and tear.

-- Get it in writing! Make sure the owners gave you some sort of rental agreement which clearly spells out all the rental policies, cancellation policies. And make sure to double check the dates. An owner's worst nightmare is to double-book because unlike hotels, there is not another room they can move the guests to.

-- Find out what is expected of you with the check-out (in order to get your deposit back). Some owners may expect you to clean the property and leave it as you found it, others might ask you to strip the beds, take out the trash, and load and start the dishwasher. Also be sure to know and abide by check-out times.

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