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AirBnB vs VRBO: Which is Best for Vacation Rental Owners?

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AirBnB vs VRBO: Which is Best for Vacation Rental Owners?

Short-term rental real estate investors have more than a handful of platforms to list their properties on, including Airbnb and VRBO. This article will highlight Airbnb and VRBO’s similarities, like the ability to list entire properties on both platforms, and differences, like VRBO not allowing shared space rental options like Airbnb does.

Luckily, property managers and owners looking to list on VRBO or Airbnb don’t have to choose between the two. If you wish to list a property type that is accepted by both platforms, you can list on both platforms.

Airbnb vs VRBO for Owners: Comparison Infographic

Airbnb vs VRBO: Overview

Airbnb and VRBO are vacation and short-term rental services. VRBO has been around longer but only has 2 million listings compared to Airbnb’s 6+ million listings. VRBO covers almost 200 countries while Airbnb covers just over 220 regions and countries.

Airbnb vs VRBO: Types of Homes

When it comes to the different property types allowed to be listed, Airbnb and VRBO have some similarities and some differences. Airbnb allows homeowners and property managers to list entire properties i.e., cabins, condos, villas, etc., in addition to shared accommodations and living spaces like rooms in apartments or hotels, and hostels. Meanwhile, VRBO is known for its traditional family stays so its platform only allows listings for standalone properties like vacation homes, luxury beach homes, and entire condos.

Property managers or homeowners looking to list entire, standalone properties can choose to list on Airbnb, VRBO, or both. Listings for shared living spaces, however, can only be listed on Airbnb.

Airbnb vs VRBO: Costs and Fees

Using these platforms to monetize your properties isn’t free. While it’s free to set up and list on both Airbnb and VRBO, and they both include up to $1 million in primary liability coverage at no additional cost, you’ll still need to pay host service fees. Both platforms have two different options for hosts to pay service fees.

Airbnb Host Costs, Fees and Example

Airbnb gives hosts the option to split service fees with the guest, where the host pays about 3% of the booking subtotal and the guest covers about 14%. Airbnb defines the subtotal as the nightly rate, cleaning fee, and additional guest fee, if applicable. The second service fee payment model is a Host Only fee, with the host paying 14% - 16% of the subtotal while the guest pays $0. 

Let’s say your nightly rate is $125 and your cleaning fee is $75. A guest booked a 4-night stay through your listing.

Here’s what each Airbnb service fee payment option would look like:

Airbnb Split Fee Example

$125 x 4 nights = $500 + $75 cleaning fee = $575 subtotal

$575 * 3% host service fee = $17.25 fee

$575 * 14% guest service fee = $80.50 fee

You’d take home $557.75 after your $17.25 host service fee is deducted from the subtotal. Your guest would pay $655.50 + taxes and occupancy fees once their $80.50 guest service fee is added to the subtotal.

Airbnb Host Only Fee Example

Using the same hypothetical listing as the example above, here’s what host service fees would look like with the host-only fee model:

$125 x 4 nights = $500 + $75 cleaning fee = $575 subtotal

$575 x 15% host service fee = $86.25

With this example, your guest pays $0 in service fees and you take home $488.75 after your $86.25 in host fees are removed.

VRBO Host Costs, Fees and Example

VRBO also gives hosts 2 service fee payment models to choose from: the subscription method and the pay-per-booking method.  The subscription method is exactly how it sounds, a $499 upfront fee is required for an annual subscription of the platform. The pay-per-booking method, however, isn’t so straightforward. 

In the case of the pay-per-booking option, hosts are charged a service fee of 5% of the booking subtotal, plus a 3% payment processing fee of the total payment amount. VRBO defines the subtotal as the total of the reservation (nightly rate * # of nights) plus cleaning and pet fees, if applicable. Total payment amount includes the subtotal, extra fees, taxes, and security deposit.

VRBO Service Fee (Pay-Per-Booking) Example

Let’s say your nightly rate is $125 and your cleaning fee is $75. A guest booked a 4-night stay through your listing.

Here is the service fee breakdown for VRBO hosts using the pay-per-booking model:

$125 * 4 nights = $500 + $75 cleaning fee = $575 subtotal

$575 * 5% = $28.75 host service fee

Let’s say the security deposit, taxes, and extra fees total $100.

$575 subtotal + $100 add’l charges = $675 total payment amount

$675 * 3% =  $20.25 payment processing fee 

Your total host fees for this booking would be $49 after adding the service and payment processing fees together. Your profit after removing your host fees from the $575 subtotal would be $526.

Airbnb vs VRBO: Cancellation Policies

Both Airbnb and VRBO have a handful of options for cancellation policies for hosts to choose. 

Airbnb has four cancellation policies: 

  • Flexible: Free cancellation for guests up to 24 hrs before check-in. If they cancel after that, you’ll be paid for each night they stay, plus 1 additional night.
  • Moderate: Free cancellation for guests up to 5 days before check-in. If they cancel after that, you’ll be paid for each night they stay, plus 1 additional night and 50% for unspent nights.
  • Firm: Free cancellation for guests up to 30 days before check-in. If they cancel between 7 and 30 days before check-in, you’ll be paid 50% for all nights. If they cancel less than 7 days before check-in, you’ll be paid 100% for all nights.
  • Strict: To receive a full refund, guests must cancel within 48 hours of booking, and the cancellation must occur at least 14 days before check-in. If they cancel between 7 and 14 days before check-in, you’ll be paid 50% for all nights. If they cancel after that, you’ll be paid 100% for all nights.

VRBO has six cancellation policies:

  • No refunds: Self-explanatory
  • 60-day policy: Full refund for guests if they cancel at least 60 days before check-in. No refund if they cancel less than 60 days before check-in.
  • 60/30-day policy: Full refund for guests who cancel at least 60 days before check-in. A 50% refund (minus the service fee) for guests who cancel at least 30 days before check-in. And no refund for cancellations less than 30 days before check-in.
  • 30/14-day policy: Full refund for guests who cancel at least 30 days before check-in. A 50% refund (minus the service fee) for guests who cancel at least 14 days before check-in. No refund for cancellations less than 14 days before check-in.
  • 14/7-day policy: Full refund for guests who cancel at least 14 days before check-in. A 50% refund (minus the service fee) for guests who cancel at least 7 days before check-in. No refund for cancellations less than 7 days before check-in.
  • Custom policy: Per the name, these cancellation policy terms vary due to their customization

Airbnb vs VRBO: Protection from Property Damage

Renting your property out to a series of short-term renters puts your property at a higher risk of incurring damage, simply because of the number of people in and out of your home. This is why both Airbnb and VRBO ensure they pay close attention to property damage protection. 

Airbnb’s Host Guarantee program provides up to $1M in property damage protection in the case your property or belongings are damaged by guests. The program also lets you set a guest security deposit, between $100 and $5,000.

With VRBO, you can choose to set a damage deposit amount, which the guest will be responsible for if they cause damage to the property. Also, completing the House Rules lets guests know the rules on things like: maximum occupancy, smoking, pets, etc. – you can even require them to sign a legal rental agreement before arriving at your property so you have proof they’re fully aware of their culpability in the case of damage.

Airbnb vs VRBO: Guests and Reach

Airbnb may sound more familiar than VRBO, but that’s likely because it attracts a much larger and younger demographic due to its short term, smaller accommodation rental options. VRBO has actually been around since 1995, 13 years before Airbnb hit the market in 2008, specializing in family vacation rentals. 

While Airbnb may not be the first of its kind, it does have a larger reach with 6 million+ listings across 220+ countries and regions, compared to VRBO’s 2 million listings across 190 countries. Keep in mind, Airbnb allows more property types than VRBO, so the platform having 3x as many listings as VRBO is expected.

Guests who are solo travelers or are traveling in pairs or smaller groups tend to prefer Airbnb because VRBO only has listings for entire properties meant for larger groups and vacationing families. Guests who travel in larger groups, vacation with friends and family, or need an entire home, condo, villa, etc. can find accommodations on both Airbnb and VRBO.

Airbnb vs VRBO: Host Customer Service

While it’s important for hosts to provide top-tier customer service to guests in order to remain highly rated, hosts also need to receive customer service as users of the platform. Airbnb offers a Resolution Center that hosts can use to request money or guests can use to request a refund. 

If guests and hosts can’t reach an agreement, they also have the option to ask Airbnb for mediation. A dedicated team member will then assess the information shared by both parties and reach a final decision. 

VRBO, on the other hand, has customer support available 24/7 via telephone or online chat to assist hosts in whatever it is they may need.

Takeaway

Most host reviews for these platforms say the same things: they both have enough cancellation policies for any host and guest to find one they can agree on, they both offer sensible service fee payment models, and they both allow entire homes to be listed for short term rental. While they’d love for VRBO to allow a larger variety of property types to be listed, they trust both platforms to advertise their listings and monetize their real estate.

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