Commission of Agencies for Renting Holiday Homes and Apartments

If you are the owner of a holiday home or apartment in Croatia, choosing the right collaboration model with a travel agency can significantly impact your visibility, number of bookings, and profits. In this blog, we will explain the two most common collaboration models with rental agencies and what the agency's commission means for property owners.

1. Representation: Agency in Another's Name for Another's Account

The representation model implies that the agency promotes your property exclusively through its own channels. In this case, the agency cannot use other platforms for promotion, and sales prices are pre-agreed with the owners. The agency’s commission is usually 15% + VAT, and the agency takes care of all promotions and rentals of the property.

2. PPO (Special Taxation Procedure): Acting in its Own Name and for Another’s Account

In the PPO model, the agency can advertise your property on various specialized platforms, including global ones such as Booking.com and Airbnb. The owner and the agency agree on net prices, while the agency manages the sales prices on all channels. The advantage of this model is greater visibility and pricing flexibility.

Unlike representation, in the PPO model, net prices are entered into the revenue record, which can be an advantage if the owner wants to avoid the VAT threshold of 50,000 EUR, as gross prices in the representation model may increase total revenue and potentially lead to entering the VAT system.

Which Model to Choose?

Both models have their advantages and disadvantages, but the choice depends on your goals. If you want your property to be advertised only on the agency's website and nowhere else, the representation model will be better. If your goal is maximizing bookings and profits, with less control over sales prices, the PPO model is optimal as it offers greater visibility and flexibility.

Additionally, in the PPO model, owners benefit because net prices are recorded in the revenue record, while gross prices are recorded in the representation model, which may have fiscal advantages in terms of VAT.

Why Choose Collaboration with Euro Tours?

Euro Tours advocates PPO contracts because this model allows greater pricing flexibility and better visibility for your property. However, the agency can also adjust and offer a representation agreement, as a large number of bookings are made directly via the Euro Tours Villas website. With its experience in promoting properties on global platforms, Euro Tours offers the highest visibility with minimal markup on owners' net prices, ensuring optimal profitability.