For property owners who want to start or grow their vacation rental business, knowing the fees of different platforms is very important. Vrbo is a top online platform for vacation rentals. It charges hosts a service fee to help them market their listings and handle bookings. This blog will provide you with a clear look at Vrbo host fees. By reading it, you can learn how to improve your pricing strategy and increase your rental income.
Key Highlights
Vrbo offers two fee structures for its hosts: a pay-per-booking model and an annual subscription.
The pay-per-booking model charges a commission starting at 8% of the booking amount.
The annual subscription costs a flat fee of $499, regardless of the number of bookings.
Hosts can choose the model that best fits their business needs and estimated booking volume.
Understanding the nuances of Vrbo's host fees empowers hosts to make data-driven decisions for their vacation rental businesses.
Basics of What is VRBO Host Fee?
A VRBO host fee is the cost of using VRBO's platform for vacation rentals. Like other online travel agencies, VRBO has these fees to help pay for things like secure payment processing, customer support, and platform upkeep.
The VRBO host fee is comprised of two main parts:
Booking Fee (Commission Fee): This is a fee charged for each booking made through the platform.
Payment Processing Fee: This fee covers the cost of processing payments securely.
The exact amounts of these fees can change based on different factors, such as the listing model you choose and where your property is located.
What is the Current VRBO Host Fee Structure?
VRBO offers hosts two distinct fee models: a pay-per-booking option and an annual subscription. Understanding the nuances of each model will enable you to select the option that aligns with your business goals and booking projections.
1. Pay-Per-Booking
In this model, you pay a service fee for each booking made through the platform. The fee is a percentage of the booking total, which includes the rental amount and any additional charges like cleaning fees.
Best For: Hosts who are just starting out or those who expect fewer bookings.
Key Advantage: No upfront costs – you only pay when you make money.
How It Works: You list your property for free and pay the fee after each booking is confirmed.
2. Annual Subscription
The annual subscription model requires you to pay a flat fee once per year, allowing you to list your property without paying additional fees on individual bookings.
Best For: Hosts expecting frequent bookings throughout the year.
Key Advantage: Cost-effective for those with many bookings, as it eliminates the need to pay per booking.
How It Works: You pay the subscription fee upfront, which covers all your bookings for the year.
Which Model Is Right for You?
Occasional Bookings: If you’re unsure about the number of bookings or are just testing the market, the Pay-Per-Booking model is a low-risk option.
Frequent Bookings: If your property is in high demand and you expect a lot of bookings, the Annual Subscription may save you money over time.
By understanding the differences between these two models, you can choose the one that fits your goals and maximize your rental income.
Strategies to Minimize VRBO Fees
Using VRBO involves unavoidable fees, but hosts can take steps to minimize their impact on earnings.
By focusing on two key strategies, hosts can improve their situation. First, they can work to enhance the visibility of their listings on VRBO. Second, they can diversify by using other booking platforms. This approach helps reduce dependence on a single platform and better manage the associated fees.
Enhancing Visibility on VRBO
Improving your listing’s visibility can help attract more guests and boost bookings. Focus on:
High-Quality Photos: Use professional images that highlight your property’s best features.
Compelling Descriptions: Write engaging, detailed descriptions that showcase what makes your property unique.
SEO Optimization: Include keywords relevant to your location and amenities to improve search rankings.
Positive Reviews: Encourage guests to leave reviews and respond to feedback.
Updated Calendar & Pricing: Keep availability and rates current to ensure your listing appears in relevant searches.
Diversifying Across Multiple Platforms
Listing your property on multiple platforms reduces dependency on VRBO and broadens your reach:
Use Other Platforms: List on Airbnb, Booking.com, and other sites to access a larger audience.
Channel Management Software: Sync your listings to prevent double bookings and maintain accurate calendars.
Encourage Direct Bookings: Create a website for direct bookings and offer special incentives to reduce commission fees.
More questions about Vrbo fees
Navigating the VRBO fees can be confusing for both new and experienced hosts. It's important to know how these fees work, how payments are handled, and how to set guest fees. This knowledge can help you have a successful time hosting on VRBO.
Let's look at some common questions to make things clearer.
Managing Fees on the VRBO Owner’s Mobile App
The VRBO mobile app makes it easy for property owners to manage their listings, but it doesn't allow for direct changes to the fee structure. Instead, the app is useful for tasks such as:
Updating your rental rates
Communicating with guests
Managing your booking calendar
You can adjust your nightly rate, which will impact fees based on your chosen pricing model—either pay-per-booking or annual subscription. However, to make changes to the fee structure itself, you will need to log in to the VRBO website.
It’s also important to note that VRBO handles all payment processing, so hosts don’t need to set up a separate payment provider.
How Do Payments Work?
VRBO simplifies payment processing for both hosts and guests. When a guest books a stay, VRBO:
Charges the guest and deducts a service fee
Sends the remaining balance to the host
Typically, hosts receive payments the day after the guest checks in. It may take 5 to 7 business days for the funds to appear in the host’s bank account. You can track your earnings and transactions via VRBO’s user-friendly dashboard.
This payment processing service is included as part of the VRBO host fee, streamlining the management of rental income.
What Fees Should You Be Charging Your Guests?
When setting guest fees, it's important to strike a balance between covering costs and remaining competitive. VRBO allows hosts to add various extra fees in addition to the nightly rate, including:
Cleaning fees: To cover the cost of preparing the property for each guest.
Extra guest fees: To charge for additional occupants.
Pet fees: To cover any extra cleaning or maintenance required for pet stays.
Being transparent about guest fees in your listing description is essential. This helps avoid any surprises for guests at booking. Additionally, consider adding a damage deposit for protection against any potential damage, which can be managed through the VRBO platform.
Conclusion
In conclusion, knowing about VRBO host fees is very important for earning more as a host. You can improve your profits on VRBO by making your listing better, using social media, and finding ways to reduce fees. It's key to keep updated about the latest fee details and to look for methods to lower costs while still giving great service to your guests. For more information and answers to common questions about VRBO fees, check our FAQs section below.
If you have more questions or need help understanding VRBO fees, don't hesitate to reach out to UpperKey for expert assistance.
Frequently Asked Questions
How can I estimate my earnings after VRBO's fees?
To find out how much you will earn, subtract VRBO’s fees from your total rental income. These fees include a commission fee based on your nightly rate, additional fees, and a payment processing fee. This way, you will see a better idea of your net earnings after paying VRBO.
Is it better for a host to choose an annual subscription over pay-per-booking?
The decision to use VRBO's annual subscription model or pay-per-booking will depend on how much you plan to book. If you think you will make more than $6,250 a year, then the annual VRBO listing fee is a better deal. If you expect to book less, the pay-per-booking option is more flexible. It does not require a big upfront subscription fee.
Can I list my property on VRBO without paying upfront fees?
Yes, property owners can list their properties on VRBO without any upfront fees. They can choose the pay-per-booking model. With this model, fees are only charged when a booking happens through the platform.
What services or benefits are included in the VRBO host fees?
VRBO host fees pay for services like marketing and reaching many travelers. They also include safe payment processing, customer support for hosts and guests, and tools to help manage listings. These services help property managers and hosts, making the rental process easier.
Are there any ways for hosts to reduce or minimize VRBO host fees?
Homeowners can lower their VRBO host fees. They can do this by promoting direct bookings on their own websites or other listing sites. If they have a high number of bookings, they might also negotiate a lower commission rate with VRBO. It is important to stay updated on VRBO’s policies. This is key because fee structures can change.
