Vrbo Fees for Hosts: What Every Owner Needs to Know
Regardless of where you decide to list your vacation rental home online, you’ll need to pay service fees to the platform. Fortunately, Vrbo gives hosts different options for how they choose to be charged, based on the estimated income you’ll make from your home.
Vrbo currently offers two options for owner fees, which include the pay-per-booking fee and the annual fee. Let’s take a look at each of these options and explore the ins and outs to help you decide which is best for your vacation rental business.
What are Vrbo host fees?
Vrbo’s fees for hosts helped to turn the platform into what it is today. Vrbo boasts over 2 million bookable rentals, and it would not have been able to support a smooth transaction and stay with that many listings, hosts, and guests without collecting fees. Vrbo collects a commission fee and a processing fee. These fees contribute to the costs of secure transactions, product development, and 24/7 customer service provided by the platform.
You will see the benefits of paying these host fees in action throughout the service. Vrbo charges your customer for you and distributes your earnings straight to your account. Instead of having your own payment provider, you just pay a small owner fee to Vrbo for all transactions. Vrbo is also always working on new features and updates to improve their site and keep up with new technologies.
As the name implies, with Vrbo’s pay-per-booking fee you pay a set percentage each time you get a booking on one of your listings. The booking fee adds up to 8% with a 3% payment processing fee and a 5% commission fee. It’s important to note that these fees don’t apply to property damage protection or cancellation protection.
The 5% commission fee is based on the rental amount and any additional fees you charge the traveler. Bookings that come from Vrbo’s expanded distribution partners may have higher commission fees. The 3% processing fee is charged on the total payment amount you receive from your guest, which includes taxes and damage deposits. If your damage deposit is refundable, that portion will be reimbursed when you refund the guest’s deposit.
If you are using vacation rental property management software to run your bookings, you will be charged only a 5% booking fee. This is calculated based on the rental amount and mandatory fees and does not include taxes and refundable damage deposits.
Rules and benefits of pay-per-booking
In order to have this fee option, hosts are required to accept payments online regularly. One advantage is that when using this option, the rental owner does not need to pay a fee upfront. However, what guests need to understand is that they will have to pay a percentage fee for each reservation. This option also gives a lot more flexibility to the host to pay as you go and only accept bookings for the days that you want to rent instead of feeling obligated to have bookings all the time to make back your initial fee.
When you sign up for the annual fee option on Vrbo, you have to pay a flat rate of $499 to list your properties. This one-time fee covers all the service fees that would otherwise be charged to your account when a guest makes a booking and is the only time that you can expect to pay for the entire year.
Rules and benefits of annual fees
For the annual fee, you do not need to be able to accept online payments, even though it is recommended that you can in order to receive direct payments for your bookings. Also, you can easily calculate the amount you will receive from a stay because you don’t have to calculate fee percentages with each booking. This fee option also includes access to special features such as listing your property on international sites, access to Reservation Manager, 50 HD photos and an interactive map. It also gives you access to a reservation calendar which makes it easier for you to keep track of when people are staying at your property.
Which Vrbo owner fee is the best choice?
The size of your vacation rental business will greatly affect your choice of which Vrbo owner fee is best for you. If your vacation rental is booked for less than six weeks out of the year or you estimate that you will make less than $10,000 from your short term rental home, the pay-per-booking option is the best option. However, if your property is booked for most weeks out of the year, or you estimate making more than $10,000, you should opt for the annual fee.
Questions about Vrbo fees
Can I manage fees on the Vrbo owner’s mobile app?
No, you can’t manage your fees on the mobile app. You can manage your base rate through the app, which will affect how much you will be charged if you are using the pay-per-booking option, but to manage your fee structure, you will have to log in to the online website.
How do payments work?
All payments and payouts will be managed through Vrbo’s own secure payment platform. The money will be dispursed one day after check-in and will be available in your bank account typically in 5-7 business days. You can check your payout summary report to see an overview of the funds you have received after the commission and fees have been deducted. You can also find payment information for a specific listing by viewing the payment section of a reservation.
What fees should you be charging your guests?
There are two types of fees you can charge your guests: standard fees and custom fees. Some examples of standard fees include fees for extra guests, cleaning and pets. Custom fees are fees that are defined and upheld by your business but not covered in the Vrbo standard fees. Excessive fees can discourage travelers from booking. That’s why it is recommended that hosts keep the fees to less than 50% of your nightly rate and also consolidate fees to 2 or less.
How does the Vrbo commission structure work?
If you use the pay-per-booking structure, Vrbo will charge a 5% commission on each booking. This commission rate is based on your nightly rate and any other optional fees you charge your guests.
Is Vrbo worth the cost?
Is it worth paying all of these fees for hosts to have your home listed on Vrbo? The answer is resoundingly yes; it’s a no-brainer! If you really want to make money from your vacation rental business, your focus should be on getting the highest amount of bookings possible, not on the costs.
Vrbo gives your listings great visibility because it is one of the top vacation rental listing sites available. Not only will your listing be discoverable on Vrbo, but also on Expedia, KAYAK, Trivago, and many more. And for all of this exposure, you only have to pay a small fee through Vrbo.