I have a confession to make. I’m now hosting our new vacation rental on VRBO, having started our listing solely on AirBNB. I’ve had to learn to love those pricey VRBO owner fees ($499 per year – read on…) and a user interface that’s clunky at best. How to decide to host on Airbnb or VRBO for owners of vacation rentals? For me, Airbnb is still the winner.
To be fair, I learned to somewhat appreciate VRBO as my secondary listing service. Frankly, I used to think VRBO hosting sucks, but have eased off that opinion quite a bit in 2019…
Within a few weeks of getting the Airbnb Experiment ready for prime-time in January, I fired up a VRBO hosting account and paid the big fat $499 annual fee, hoping for the best.
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 old school and less intuitive than modern digital designs. Any sense of human-centered design remains elusive for this stalwart aggregator of vacation rentals.
VRBO Owner Fees Are Expensive at $499 Per Year
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, I got four bookings in a SINGLE DAY. Not sure what 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.
Which Is Better for Hosting: VRBO or Airbnb?
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 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? 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%. 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 overprice their listing. In effect, the guest service fee comes out of the owner’s pocket.
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, one or two-night stay, last-minute arrangement. But over the last few years, these two have started to encroach on each others’ turf. Look no further than our 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.
Can I Charge More for My Listing on 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 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 cocaine down the toilet will make a fine guest post on Budgets Are Sexy. My patron saint J. Money gets all the juicy ones.
Hosting 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 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 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 of 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!
Please share in the comments (if you’re a host) whether you suggest Airbnb or VRBO for owners of vacation rentals.
*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.
Update 6/24/19: My experience with VRBO has improved considerably since this post first published. I just had to get used to the clunky interface, mainly. As for the fees, I can get over that. Why? VRBO has overtaken Airbnb as my primary source of bookings in Year 2 of the Airbnb Experiment. Airbnb or VRBO for owners is best answered, “Yes. BOTH.”
Check out How to Establish a Profitable Vacation Rental: The Definitive Guide for a more in-depth overview.