If you’re looking to expand your vacation rental presence beyond Airbnb, Vrbo is an essential platform to consider. As a part of the Expedia Group, Vrbo boasts over 2 million listings worldwide, attracting millions of guests in search of the perfect accommodations. However, it’s important to note that, like any other channel, listing your property on Vrbo comes with host fees.
In this blog post, we will provide you with detailed information about Vrbo host fees, empowering you to make informed decisions and optimize your operational strategies.
What is a Host Fee on Vrbo?
The Vrbo host fee is the cost associated with listing your property on the Vrbo platform. They encompass a range of fee components to ensure you receive the best service and experience.
Vrbo offers two different listing models: pay-per-booking fees and annual subscription.
How much does Vrbo charge hosts?
Hosts can choose the model that best suits their needs and booking volume. Understanding the fee structure is essential in determining the most cost-effective option for Vrbo owners.
Pay-Per-Booking:
Vrbo charges a commission starting at 8% for hosts using the pay-per-booking model. Here is a breakdown of the overall Vrbo host fees:
- 5% Vrbo service fee: This fee is calculated based on the total booking amount, including any additional fees (such as pet fees or cleaning fees), but excluding taxes paid by guests and refundable deposits. The Vrbo service fee covers the costs of secure transactions, product development, and 24/7 customer support provided by Vrbo.
- 3% Vrbo credit card fee: This fee is calculated based on the total payment amount received from guests, including additional fees, taxes, and deposits. When you refund a deposit, you receive a portion of the payment processing fee charged for the deposit.
- If applicable in your country/region, a 5% commission is charged for value-added tax (VAT).
- Vrbo host fees vary in percentage depending on the amount paid for the booking. Generally, the higher the booking amount, the lower the rate of Vrbo fees.
Many hosts prefer the pay-per-booking model as it does not require upfront payment of an annual fee. This model is suitable for:
- Hosts who list their properties on multiple channels
- Hosts with their own direct booking websites
Annual Subscription:
This model is quite simple and requires a one-time payment of $499 as the annual subscription fee. It is suitable for:
- Hosts who primarily rely on Vrbo for bookings
- Hosts with an annual Vrbo booking revenue of over $6,250
How to Reduce Dependency on Vrbo?
Vrbo is undoubtedly a powerful rental platform for many hosts. However, as a savvy host, it’s not wise to rely solely on Vrbo and concentrate all your resources on one platform. Depending too heavily on Vrbo leaves your business vulnerable to potential losses if they increase their fees or change their algorithm, affecting your rankings and rental business.
To safeguard your business and mitigate risks, here are three methods to reduce dependency on Vrbo.
1. List your properties on multiple booking platforms for more opportunities.
Expand your reach by listing your properties on multiple booking platforms such as Airbnb, Booking.com, Expedia, and others.
This widens your audience and increases your chances of securing bookings. Different platforms attract different user demographics and cater to distinct market demands.
By diversifying your presence across multiple platforms, you maximize your exposure and leverage these diverse opportunities.
2. Establish a direct booking website to avoid commission fees.
Another way to reduce dependency on Vrbo is to create your own direct booking website. Having your own website allows direct communication and bookings with customers, bypassing the need for hefty commission fees.
Additionally, by building a strong brand image and offering exceptional service, you can attract more direct bookings from customers.
We have previously written an article specifically discussing how to increase revenue through direct booking websites.
3. Utilize a channel manager to avoid double bookings.
When you list your properties on multiple different platforms and also have your own booking website, managing calendars becomes a cumbersome task, and even a slight mistake can lead to serious issues like double bookings.
To avoid these troubles, and save your time and resources, you need to use appropriate tools to assist you.
A channel manager, like Hostex.io, can centralize and synchronize property information and booking statuses across different platforms, ensuring availability and accuracy. When a booking is made on one platform, the channel manager automatically updates the availability on other platforms, minimizing the risk of double bookings.
Additionally, the channel manager allows for unified management of pricing, messages, and reviews, simplifying operations, reducing errors, and providing a seamless customer experience.
Vrbo Host Fees: FAQs
How much does Vrbo charge owners?
Vrbo typically charges owners 8% per booking. This includes a 5% Vrbo manager fee and a 3% Vrbo payment processing fee.
Why do I need to pay the Vrbo payment processing fee?
The purpose of the Vrbo payment processing fee is to ensure that the platform can continue to provide high-quality services and features to help hosts achieve successful bookings. These fees are used to support platform operations, technical development, and marketing efforts, and provide round-the-clock customer support for both hosts and guests.
Although the payment processing fee may increase your operational costs, Vrbo, as a popular vacation rental platform, can help you attract more potential customers and provide a range of tools and features to manage your listings, process payments, and deliver a superior customer experience.
To ensure that you can price your listings appropriately, you may consider incorporating Vrbo’s payment processing fee into your pricing strategy. Additionally, you can compare commission rates and fee structures across different platforms to ensure that you choose the one that offers the best value for your specific needs.
How to avoid Vrbo service fees?
Avoiding Vrbo’s service fees can be challenging as they are one of the charges imposed by the platform to provide services to both hosts and guests. These fees are used to support platform operations and deliver a quality customer experience.
However, as a host, you can employ certain strategies to minimize the impact of these fees:
- Pricing strategy: Consider incorporating Vrbo’s service fees into your pricing strategy. You can adjust your rates accordingly to offset the cost and display a more competitive price to potential guests.
- Explore other platforms: Consider listing your properties on alternative competitor platforms. Different platforms may have different fee structures, and some may charge lower service fees or even no service fees.
- Establish direct contact: Provide contact information, such as email or phone number, in your property listings, encouraging potential guests to reach out to you directly for bookings. This way, you can bypass the Vrbo platform and avoid paying service fees. However, this approach may increase your workload and risk as you would need to handle bookings and payments yourself.
Please note that regardless of the strategy you choose, it is essential to abide by Vrbo’s policies and terms. Violating the platform’s regulations may put you at risk of account suspension or cancellation.
Which is better: Airbnb or Vrbo?
Both platforms are highly popular, and they have many differences in terms of market size, user profiles, booking process, host support, fees, and policies. We have discussed this in the blog Vrbo vs Airbnb: Which is the Best Platform for Hosts.
The best decision is to carefully research and compare the characteristics, user reviews, and property selections of both platforms before making a choice that aligns with your specific needs.
