Damage Deposit – To Have Or Not To Have For Your Vacation Rental?

Aug 15, 2018 | Listing 101

Have you ever wanted to collect a damage deposit to safeguard your rental property, but at the same time fear the risk of driving vacationers away with higher upfront costs? This is something a lot of owners struggle with. But, TripAdvisor Rentals might just have the solution you need.

The Problem

Setting up a damage deposit takes a lot of consideration. On the one hand, it gives owners peace of mind to know that any physical damage caused by the guest during their stay is covered. It also encourages travelers to take extra care of the property and its contents.

On the flipside, there’s no hard and fast rule on how much a damage deposit should be. Too high and you risk putting prospective guests off with the higher upfront cost. Too low, and it may not be sufficient to cover potential damage. Very often, owners will also have to deal with the hassle and headache of administering damage deposit payments and returns, especially if they are in conflict with the guests for not returning some or all of the deposit.

How TripAdvisor Rentals Can Help

With TripAdvisor Rentals’ Deferred Damage Deposit feature, you can now enjoy all the benefits of damage deposits without the drawbacks. Guests no longer have to pay a huge sum upfront. Instead, TripAdvisor holds onto their payment details and only charges them if you make a claim and it is settled in your favor. Here’s how it works:

  • Step 1: You decide on the size of the damage deposit and add this in your dashboard (Go to My Listings and you’ll find it under Booking Policies)
  • Step 2: We save the guest’s payment details at the time of booking to be charged in the event of a successful claim (the guest is made aware of this and the damage deposit amount on the checkout page)
  • Step 3: You’ll be reminded by email when the guest checks out. From this date, you’ll have 7 days to report any damage
  • Step 4: If you have no damages to report, no further action is required and the guest won’t be charged. If you need to raise a claim, go and Create a Claim in your dashboard
  • Step 5: We’ll let you know when the damage deposit has been processed
TripAdvisor Rentals’ Deferred Damage Deposit feature gives you peace of mind by providing a financial guard for your property, up to US$1,000 (damage deposits over US$1,000 will be paid upfront as part of the total booking cost instead).

Lower rental costs also mean your property could attract more vacation shoppers and translate into more bookings. Not only that, traveler experience will also be improved at the same time!

Here are some other tips to consider when it comes to setting up damage deposits:

Apply damage deposits only to cover physical damage to your property, such as broken items or appliances. You can add other indirect costs you might incur (ex. Cleaning costs, utility bills and additional guest fees) as separate fees in your account to avoid confusion.


Prepare a property inventory checklist and have your housekeeping team do a property check within 24 hours of guest departure and before the arrival of your next guest. Encourage your guest to take note of the checklist as well as the state of the property when they first check in. In an event of a claim, remember to take photos of the damage and keep receipts as supporting evidence to avoid any discrepancies.

While TripAdvisor is not affiliated with any insurance company, you can always opt for a vacation rental insurance with your own insurance provider to help cover certain damages to your property. So, instead of applying a damage deposit, you can choose to add a non-refundable insurance fee as a separate cost for your property. This amount, which is usually far lower than a damage deposit, can then go towards your insurance.


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