Image: The Griswolds
AP
In this image provided by HomeAway, Beverly D'Angelo, left, as Ellen Griswold, and Chevy Chase, as Clark Griswold, appeared in an ad for vacation-rental Web site HomeAway. The ad marked a coming-of-age for the vacation rental industry.
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updated 3/28/2010 3:26:32 PM ET 2010-03-28T19:26:32

With three adult children, Teri Hurley made sure to book a house with three bedrooms for her family's Thanksgiving vacation in New York's Catskill Mountains.

She was stunned, as well as angry, when she discovered that the third bedroom of the rental property was down a narrow, steep set of stairs under a kitchen trapdoor, half hidden by a scatter rug.

"My son volunteered to play dungeon boy and took the basement accommodation," Hurley said. "When he wanted to enter the living area, he had to pound on his ceiling — our floor — so we could open the trap door to let him up!"

When Hurley got home, she complained to VRBO.com, from which she had booked the rental online, but ultimately decided not to go through with a formal complaint. The disappointing experience in 2008 has not stopped her from renting on VRBO.com, which stands for vacation rentals by owner. For 10 years her family has stayed at the same Florida villa she found on VRBO. And last Christmas, she rented a "stunning" log house on 10 acres (4 hectares) outside Woodstock, New York, also from VRBO.

The vacation rental market, booking a vacation property directly from the owner or from a property management company, is booming. A study released in 2009 by the travel industry research firm PhoCusWright Inc. estimated the market to be $24.3 billion or more than a fifth of the U.S. lodging industry (based on room revenue) of $107 billion in 2007.

Alexis de Belloy, vice president of U.S. business at HomeAway Inc., the world's largest vacation rental marketplace and owner of sites including HomeAway.com, VRBO.com and VacationRentals.com, says HomeAway facilitates more than 300,000 bookings a month with only a "handful of instances" of unsatisfactory rentals.

While he was not familiar with the particulars of Hurley's complaint, he says HomeAway has a staff of 100 who do customer support including investigating complaints. Documentation of a problem can lead to a listing being taken down. He also notes that the company offers rental insurance up to $10,000 that protects against Internet fraud and foreclosure, with the average cost for insurance about $44.

The demand for vacation rentals is being driven by a number of factors: a large supply of second homes, some purchased as investments; more travel by large, multigenerational groups including for family reunions; and economies of scale which can make a vacation rental a better value than hotels, especially for longer stays. Another driver is the Internet, which lets both rental companies and individual homeowners go online to market their homes.

But the industry is relatively new, fragmented and unregulated. Consider that Conrad Hilton purchased his first hotel in 1919 and that HomeAway was launched in 2006.

When HomeAway ran a Super Bowl ad this year featuring Chevy Chase and Beverly D'Angelo in a reprise of their roles as the Griswolds from the 1983 hit comedy "National Lampoon Vacation," it marked a sort of coming-of-age for the industry.

As with any new thing, consumers need to be cautious.

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Web photos can be deceiving. Online reviews can be planted by people with an agenda, good or bad. Even if a glowing review were once true, properties deteriorate if they are not maintained. What can a would-be renter do? Insist on a rental agreement. Pay with a credit card. Ask lots of questions, by telephone as well as e-mail. Ask for references. Take out rental insurance. Inquire about extra fees. Find out how and when the security deposit will be returned.

Also this: Keep records. Make photos or videos of substandard conditions. Complain promptly if a problem arises. Seek out the Better Business Bureau if you feel you were victimized. Finally, know your needs. If you are traveling to a mountain hideaway in winter, who will plow the road to the main highway if there is a blizzard?

Hurley's complaint about the "dungeon" third bedroom is mild compared to some of the horror stories online. John Romano, a vacation rental property owner who markets his properties on VRWD.com, which stands for Vacation Rentals Web Directory, started a companion site in 2006 called Vacation Rentals Watchdog — VRWD.org — where people can go to gripe.

There you will find scary stories about people who put down thousands of dollars in security deposits and travel hundreds or thousands of miles only to discover stained couches, cobweb-covered grills, dilapidated patio furniture, ant infestations and worse. Some stick it out. Others take the loss, spending additional thousands of dollars for alternative lodging.

Even rentals that do not prove to be disastrous can be inconvenient and provide a few heart-stopping moments.

Alicia Cackley, an executive with the federal government, took her 79-year-old parents to Italy a few years ago, booking apartments online in Rome, Assisi and Lucca.

All went well until they got to Lucca, where they planned to stay for a week and a half, taking day trips to Florence. The stone guest house on a larger estate was farther outside the city than she had expected and had very little heat, in October.

"Heat is not an amenity," Cackley observed. "We sat around wrapped up in blankets." After three nights they moved out and she had to scramble to find new lodgings in town without speaking Italian.

Such cautionary tales resonate with me because of my own experience last December, when my husband and I rented a studio apartment in Paris for 11 days through VRBO. We arrived to discover no heat in the kitchen or bathroom, peeling wallpaper, rusty burners on the stovetop, broken light fixtures, and clumps of hair and dust on the floor. The worst moment, perhaps, was when the bed frame collapsed when we lay down to take a nap a few hours after arriving.

After staying one night — the owner came that evening to repair the bed frame with packing tape — we moved into a hotel. Since we had paid the deposit by credit card, we disputed the charge and received a conditional credit. In addition, the owner refunded us three nights (minus a 50 euro fee) because he rented the place those nights.

We complained to VRBO after returning to the United States and found their Trust & Security Team professional and responsive. Over the next few weeks, we discovered reams about the vacation rental industry the hard way.

One is that VRBO is "not a party to any rental transaction" and "the truth and accuracy of the listings are solely the responsibility of each user." That disclaimer can be found by clicking the Terms and Conditions link at the bottom of the home page.

Yet despite my story and others like it, many people find great properties for good value. Douglas Quinby, senior director of research at PhoCusWright, found that 89 percent of people who booked vacation rentals say they would do it again within three years.

Also, the marketplace is growing.

FlipKey.com was launched in 2008 to help vacation rental property managers and owners promote guest reviews. In contrast to sites that let anyone post, FlipKey collects reviews by sending e-mails to people who actually stayed at a property. Late last year saw the launch of another business model, SecondPorch.com, which lets people list and find vacation rentals through social networks like Facebook.

Greg Gross, who blogs about travel at I'm Black & I Travel!, sings the praises of vacation rentals in a post about an apartment he rented in Paris last year.

"If you simply must have someone else making your bed and leaving a mint on your pillow every day, this may not be for you," he warns.

Then he goes on to list the advantages: a real kitchen, which cuts down on food costs; a washer and dryer, which could mean less luggage; and the invaluable perspective you get from rubbing shoulders with the locals.

"So if you like saving money and feeling more like a traveler than a tourist, consider a short-stay apartment for your next extended trip," he says. "And buy your own damned mints."

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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