I have a confession to make. I host on VRBO.
Within a few weeks of getting the Airbnb Experiment ready for prime-time in January, I fired up a VRBO.com account. Talk about swallowing a big fat pill, sideways.
Vacation Rentals by Owner has been around for a while. They had established themselves as the go-to place for week-long (and longer) summertime rentals. The interface has always been pretty clunky and bare-bones. I’ve used VRBO as a traveler. It’s not a very intuitive experience. In other words, it sucks.
Over time, the ability to host on VRBO has improved. Somewhat. The interface has been upgraded, but as a host, I still struggle with where to focus my attention. Human-centered design remains elusive for this stalwart aggregator of vacation rentals.
That sideways pill
Oh yeah. I had to fork over $499 for a one-year “subscription” fee. How does that hit your frugal funny bone, fine readers? The alternative was to let VRBO take an 8% cut from each booking over the next twelve months. The math says I’d need to book at least $6,238 in reservations this year, to make the $499 option a good choice. If I can book $10,000 or more, then my effective cut to VRBO is 5% or less.
As I rolled through February, March, and April. VRBO was producing absolute crickets for me. I was getting worried. At least Airbnb had produced half a dozen bookings by this time. Had I just blown $499? Would I get ANY reservations from this outfit? The photos, taglines, and descriptions were the same as what I had posted to Airbnb, dammit!
All of a sudden, as if I got picked for a Rockstar Finance feature, I got four bookings in a SINGLE DAY. Not sure that heck happened, but I was relieved to finally be getting some action from my “plan B” marketing channel. Maybe Sunday, April 29th was a date many of us decided, “f**k it. Winter cannot win. I’m booking a summer getaway before refilling my wine.”
By the midpoint of May, we had secured about $4,000 in reservations for 2018. We’re now almost two-thirds of the way there, from turning my iffy-at-best $499 sunk cost into an okay decision. We’ll see how the Airbnb Experiment unfolds for the rest of 2018.
The fall season is pretty much all that’s left to book. September and October are going to be winners. Sure, it won’t be beach and boating time. But the fall colors and festivals, coupled with slightly cooler but still warm temps will draw in lots of visitors.
If nothing else, weddings will pay the bills. November and December are long-shots. Some good n’ fluffy early snow? With luck, we’ll some skiers will swarm up for a few weekends of slope action. Short of that, I may have to offer TWO complimentary bottles of chardonnay.
Should I be a host on Airbnb or a host on VRBO? (or both?)
Airbnb is still my go-to. They only stick me with a 3% fee per reservation. Their hosting platform is much more intuitive than VRBOs. Also, Airbnb also handles all the occupancy taxes owed by guests. The taxes are pretty nominal – about 6% of the reservation. Traditionally, these fees are collected by owners, who then turn around and pay the state.
VRBO? sh*t. That’s way too much trouble for them. So now I have to register with the state and go through all this administrative baloney, just to make sure VRBO-based occupancy taxes get paid. What a hassle.
VRBO hasn’t been charming the socks off its travelers either. A couple of years ago, on the heels of being purchased by Expedia, VRBO began imposing guest “service” fees of 5-9%. Apparently, Expedia is “banking up” to compete with Airbnb in the vacation rental aggregator wars. Now in fairness, Airbnb has always charged a service fee to travelers of roughly the same amount.
What upsets many VRBO owners is that they’re already paying a hefty subscriber fee. Before 2016, you could simply rent your property for a higher fee to offset some of the subscription costs. But now that VRBO is taking a bite out of the guest’s wallet too, the owners have to be mindful not to over-price their listing. In effect, the guest service fee comes out of the owner’s pocket. Baby owner says “WAHHHHH!!!”
Head to head:
VRBO (Home Away) has long been the leader in the long-term (one week or more) family vacation rental space. Think of Airbnb as the metropolitan, night or two stay, last-minute arrangement. But over the last few years, these two have really started to encroach on each others’ turf. Look no further than our own “Airbnb” setup. It’s tailor-made for VRBO, but I felt that Airbnb had more to offer.
- User interface: Airbnb wins. Hands-down. So much easier. Breath of fresh air when compared to VRBO.
- Fees: Airbnb wins. Also hands-down. I only pay 3% to Airbnb, vs. the 5-8% I’ll wind up owing for the privilege to host on VRBO. Guests pay about the same with either platform.
- Occupancy taxes: Airbnb wins. They collect from the guest and then pay the state / local authority. With VRBO, all you get is a calculation of what you need to pay out of what’s collected from the guest. Pain in the ass.
- Guest vetting: Airbnb wins. With VRBO, I feel compelled to use their Instant Booking feature to get visibility to my listing. Sadly, their Instant Book feature doesn’t come with the same level of safeguards as Airbnb provides. I’m always a little more nervous with unrated VRBO guests.
A tip of the hat to VRBO
About the only thing VRBO has going for it now is that 80% of our recent bookings (within the last three weeks) have been with them, not Airbnb. I think there’s a seasonality aspect to this, but also the location of our rental is in the heart of vacation-land, Michigan. Folks looking for a summertime getaway up north know VRBO quite well.
We’re pretty optimistic we’ll meet the threshold for making that $499 annual fee worthwhile, but it’ll be a marginal return at best. Next year, we’ll likely switch to the 8% per reservation fee and see how that goes. Plus, it’s a better use of up-front cash, since we could easily put that $499 to better use.
Another fascinating thing I’m seeing is that I’m able to charge about 10% more on VRBO than on Airbnb, and yet I still seem to get more bookings when I host on VRBO. Maybe I should’ve called this the “VRBO Experiment” from the get-go?
Nah, way too soon to give any real edge to being a host on VRBO v. Airbnb. We’ll have to keep an eye on how this experiment pans out over the next six plus months of 2018. We’ll do a full retrospective on the financial figures, but also on guests. I’m sure there’ll be some doozies that come through, from both hosting sites.
The first one to try to flush a brick of crack down the toilet will make a fine guest post on Budgets Are Sexy. My patron saint J. Money gets all the juicy ones.
Host on VRBO: Calendars
Fortunately for VRBO, it’s pretty easy to sync calendars with Airbnb. Each platform allows you to cross-sync, so that each time a guest books on one platform, the dates will appear as taken on the other. This is absolutely crucial for managing two booking sites with a single door. The worst possible scenario is having to cancel a new reservation that overlapped an existing one. Cancellations by owner are a real black-eye for your ratings and visibility.
A few tools that really do a fine job of consolidating everything for me are Beyond Pricing and TurnoverBnB. Beyond Pricing charges a fee of 1% of all bookings. It’s a nominal fee, and well worth it. They take into account seasonality, weekends v. weekdays, and local events, among other variables.
When I need to tweak my pricing, I can do so for both platforms straight from “BP”, and not even bother having to go into VRBO.com or Airbnb.com to change anything.
As for keeping my cleaning person’s head screwed on straight, she now uses TurnoverBnB. It’s a free app (as of now) she uses to confirm new guests ahead their visit, to ensure she can block time to get in and reset the place. This puts her in the driver’s seat, and saves me from having to constantly email and text about new guests.
I’m pretty sure I’ve bitched about this before: Being a host is like a part-time job. Thankfully, these tools help immensely to automate some key tasks. I also benefit from having my parents living nearby. They’ve already spent several hours finishing the details I couldn’t get to this past January. God bless ’em!
*Postscript: No sooner do I publish this post, than I get an email from VRBO with my first pay-out from them. Get this: They bill the hosts for the guest’s credit card transaction fees. Talk about nickel and diming. Airbnb does not pass this fee to the host (or guest, as far as I’m aware.) Strike 9, VRBO.
I also figured out why VRBO bookings had picked up in recent weeks, while Airbnb had waned. I had set a minimum stay of 4 nights on Airbnb for the summer months, and forgot to set it on VRBO. I’ve since modified the minimum stay to 2 nights on both platforms. Chalk this up as yet another pitfall to managing listings across two platforms.
Check out How to Establish a Profitable Vacation Rental: The Definitive Guide for a more in-depth overview.
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I’ve used both as a renter. VRBO was always my go-to for ski resort condos at the villages in the big Colorado resorts, since they had sooo many listings. But that’s changed now with AbNB dominance.
Same here with the summer beach rentals, AF. Appears that where VRBO had held court for a long time, Airbnb is making inroads. I don’t know that I’ve seen any indication that VRBO is catching on in urban/metro short term stays, where Airbnb got its footing. Could be a one-sided battle?
We have had pretty good luck traveling with VBRO/Home Away (I think the two merged at some point?) We haven’t used it much recently, but I think they started charging guests fees to book a couple years ago. Which took a pretty competitive pricing arrangement to one that is less so from the travelers standpoint. Tom
Hey Tom. That’s right, they sure did start charging those fees – back in early 2016. Was quite an upheaval at the time, and I think a lawsuit emerged from it. My suspicion is VRBO will hang on for a while longer, but the decision whether to improve their interface, pricing model, and guest vetting process will determine how long they last.
i think i’ll book a summer getaway before i top off my wine is how it works in our house around march. we just used an airbnb in new orleans and had one in sonoma that worked out well a few years ago. our friends rents us his cabin in the adirondacks mountains of ny for a week every year. we rent directly from him and he manually blocks out the week on vrbo but this year we didn’t contact him early enough and july and august were all booked up and we’re there in september. doh! i guess the platform works well for him.
Is it your first glass of wine, or the second or third refill, Freddy? 😉 Sounds like you’ve picked some sweet destinations for your trips. Haven’t been to New Orleans, but it’s on my list.
We similarly hold calendar space for friends and relatives. That’s one way to avoid the fees and other non-sense, at least for brief spells of the year.
Getting fees from both sides seems rough, but I guess that’s their model and they can go that route if they want.
Ultimately I feel like these sort of inefficiencies will get disrupted over time by some enterprising outfit (like you mentioned with your Expedia note): competition wins out eventually.
For what it’s worth, I think you’re doing the right thing by having this be a two horse race for now.
It is pretty rough. I’ve toyed with the idea of dumping them for next year and going with just Airbnb to simplify things. We’ll see. I left a footnote in my post about the “Tip of the Hat” part — Airbnb was being unintentionally handicapped by the host. D’oh.
Soon enough, we could have a one horse situation, and I would be much happier managing that situation.
Filing this one away for future reference. I have noticed that VRBO looks a lot more Airbnb-like now than it did five years ago. Bummer that it’s not nearly as user friendly from an owner’s perspective.
Glad to hear you’re filling up the calendar one way or another, though.
Cheers!
-PoF
(Dr.) Dude… found out literally within an hour of posting this that VRBO wants to ding me for credit card transaction fees – for payment made by the guest. Sigh… It’s a nominal amount, but talk about nickel-diming the host.. *grumble*
Yikes I had no idea the fee to list on VRBO was so much. We go back and forth as far as booking for our own trips. I check both each time to compare pricing because for some areas/times one is WAY less expensive than the other for whatever reason.
I tell you what. It’s frustrating. As a guest, I can only imagine how the new service fee makes listings less competitive v. Airbnb.
We rented a place using VRBO last summer, only because there were not Airbnb listings in that area then. That’s changed now.
I like HomeAway better than Airbnb. I’ve found HomeAway has better options and more choices than Airbnb does. I still use both though!
Hey Gwen! From a traveler’s POV or a host’s?
I use both VRBO and Airbnb, but hate VRBO service fees! Not quite as competitive because of it but find it easier to find what I am looking for.
That makes two of us! Those fees just came from out of left field a couple of years ago. I’ll have to keep using them until Airbnb puts a bigger dent into the area where I rent out in Northern Michigan. VRBO is quickly approaching 50% of all bookings, with higher rental rates to boot!
I have not used VRBO yet but I am comfortable using Airbnb. I feel that there is a nice connection between the host and the guest. You do not have to see each other but everything is already set before you arrive at your booked place. Hosts communicate with you through messaging. I feel so safe and secure booking at Airbnb because it requires guest and host to register personal information without divulging the info at each other.
VRBO is growing on me a little since this was posted. I think mainly because they are the bread and butter for summer vacations still, particularly where the entire house is up for rent.
Communication is decent on the platform, and I think the amount of guest issues has been about equal between them and Airbnb. Maybe worth looking into, Norbert?
We were part of the VRBO hosting family for a condo we own from 2007 until 2017. They bumped the subscription fees and added the new fees for guest booking and changed the way owners were able to interface with potential guests. They claimed the new fees were going to provide better services but it you look through the review sites there are significant issues with VRBOs dealings with both hosts and guests. We tried the pay per booking before we were forced into the accepting instant book along with their credit card processing system at which point we were no longer in control and able to vet potential guests. The inability of guests and hosts to communicate before confirming reservations serves no one and is evidenced by the complaints being filed. We abandoned VRBO in 2017 and use AirBNB and Owner Direct for our Canadian listing. We may not get as many rental days but at least we have better peace of mind.
Hi Ken! VRBO is not as bad as I originally thought. It just took a while to get situated, as it turned out. I’m only three months into the year, and the $500 subscription fee is a mere 4% of bookings in 2019! At this rate, I’ll wager the fee will represent a 2% take, and I’m okay with that. I too was nervous about instant booking on VRBO, but have since embraced it with very few issues to-date. Knock on wood!