Short-term rental platforms like VRBO and Airbnb have transformed the vacation rental market, providing both hosts and guests with flexible, affordable, and accessible lodging options. However, for property owners managing multiple rental spaces, it’s important to understand the differences between these two rental giants and how they can impact your business.
What’s changed in the short-term rental market?
The short-term rental market has seen tremendous growth over the past decade, transforming the way travelers book accommodations. This evolution can be traced back to the early 2000s when online booking platforms like VRBO and Airbnb began disrupting the traditional hospitality industry. Initially, short-term rentals were largely confined to vacation homes or seasonal rentals. Still, with the rise of digital platforms, they expanded into urban areas and became accessible to a global audience.
Today, the short-term rental market is booming, driven by changes in consumer preferences and advancements in technology. Travelers increasingly seek unique, affordable accommodations, while property owners capitalize on new revenue streams. This shift has allowed the short-term rental industry to compete directly with traditional hotels, and platforms like Airbnb and VRBO are at the forefront of this movement.
Key differences between VRBO and Airbnb
VRBO
(Vacation Rentals By Owner) was one of the pioneers in the space, launching in 1995 with a focus on whole-home rentals. Its model attracted vacationers seeking more space, privacy, and long-term stays, primarily used by families or larger groups. VRBO allows property owners to list entire homes, offering a traditional vacation rental experience, particularly for high-end properties or vacation homes in tourist destinations.
Airbnb
Airbnb, founded in 2008 by Brian Chesky, Joe Gebbia, and Nathan Blecharczyk, introduced a more flexible approach, offering everything from shared rooms to luxury properties. Originally created as a budget-friendly option, Airbnb quickly evolved to include entire homes and unique stays like treehouses and houseboats, appealing to a broader audience, including solo travelers and business professionals.
While both VRBO and Airbnb serve as popular platforms for short-term rentals, they differ in several key areas. Below is a breakdown of some of the most pronounced differences.
| Feature | VRBO | Airbnb |
|---|---|---|
| Type of Listings | Whole-home rentals | Whole homes, shared spaces, private rooms |
| Guest Demographic | Primarily families, long-term renters | Solo travelers, families, short-term guests |
| Fees for Hosts | 3% per booking (pay-per-booking) or annual subscription | 3% per booking |
| Guest Service Fees | Typically lower | Can be higher depending on location and length of stay |
Airbnb’s platform opened the door to urban rentals, creating opportunities for a more diverse set of hosts and guests. By 2019, Airbnb’s community-driven approach led to rapid global growth, with over 7 million listings in 220 countries, far surpassing VRBO in scale.
Airbnb vs VRBO fees: A breakdown
Both platforms charge fees to hosts and guests, and understanding these costs is crucial for maximizing profits. While Airbnb and VRBO have similar fee structures, the exact amounts can vary depending on the listing model and services offered. Hosts must factor these fees into their pricing strategy to stay competitive while still making a profit.
Airbnb fees
Airbnb charges hosts a flat 3% service fee per booking, which is deducted from the payout and covers payment processing and platform use. However, hosts may also face additional costs like cleaning fees and taxes. Guests are charged a service fee that typically ranges from 14% to 20%, which, combined with cleaning costs and local taxes, can significantly increase the total price.
VRBO fees
VRBO offers two pricing models for hosts: a 3% pay-per-booking fee or an annual subscription of $499. For guests, VRBO charges a service fee ranging from 6% to 12%, generally lower than Airbnb’s, making it more attractive for long-term bookings. Cleaning fees and taxes also apply, similar to Airbnb.
Additional fees relevant to both
Both platforms allow hosts to charge cleaning fees, and hosts are responsible for ensuring local taxes are collected. Refundable security deposits can also be requested by hosts to cover potential damages.
Airbnb vs. VRBO: $1,000 booking
When hosting on short-term rental platforms like Airbnb and VRBO, it’s important to grasp the fee structures and how they might pertain to a real-life rental property. Both platforms charge fees to hosts and guests, but the total costs can vary significantly depending on the platform, the pricing model, and the length of stay.
By examining the host fees, guest service fees, and additional charges such as cleaning or taxes, you can better understand how each platform’s fee structure affects your profits and your guests’ total costs. To illustrate how these fees impact overall costs, let’s explore two scenarios based on a typical $1,000 booking.
Below, we break down the data for Airbnb and VRBO, showing how their fees compare. You can utilize this information can help you adjust your pricing strategy accordingly.
VRBO vs Airbnb for hosts: Pros and cons
When deciding which platform to list your property on, it’s important to weigh the advantages and drawbacks each offers for hosts. VRBO tends to attract long-term renters and families, while Airbnb’s flexibility allows hosts to reach a broader audience. The table below highlights the pros and cons of each platform for hosts.
| Platform | Pros | Cons |
|---|---|---|
| VRBO |
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| Airbnb |
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Listing on VRBO vs Airbnb
When deciding where to list your property, it’s essential to consider the visibility and audience size on each platform. Airbnb and VRBO differ significantly in their traffic and the number of listings they host. While Airbnb has a much larger user base and far more listings, VRBO offers a more niche market with less competition among hosts.
Best practices for optimizing listings on Airbnb vs VRBO
When optimizing your listings, both VRBO and Airbnb require different strategies based on their target audiences. For VRBO, it’s important to use high-quality photos and provide detailed descriptions that highlight family-friendly or group-oriented amenities, as these types of travelers are often searching for whole-home rentals. On Airbnb, listings should appeal to a broader range of guests, including solo travelers, families, and those looking for shorter stays. Offering clear, flexible options in your descriptions, such as allowing for flexible check-in times or short-term bookings, can help attract more guests across various demographics.
VRBO vs Airbnb cancellation policy
Cancellation policies play a key role in booking rates and guest satisfaction, as hosts need to balance income protection with flexibility. Airbnb and VRBO take different approaches to cancellations, so it’s important to understand their policies.
Airbnb
Airbnb offers three cancellation options: flexible (full refund up to 24 hours before check-in), moderate (refund if canceled five days before), and strict (refund only if canceled 14 days in advance). The super strict policy for high-end listings provides a 50% refund if canceled at least 30 days in advance.
VRBO
VRBO tends to be stricter, with full refunds usually only available if canceled 30 days before check-in. Cancellations within that window often result in partial or no refunds, which protects hosts but may deter guests seeking flexibility. VRBO also offers a non-refundable option for hosts, where guests receive a discount in exchange for no refund options.
Recommendations based on your hosting style: Airbnb vs VRBO
Choosing between VRBO and Airbnb depends largely on your hosting style and the type of property you manage. Each platform offers distinct advantages depending on your goals as a host, whether you prioritize long-term rentals, niche vacation homes, or short-term stays in busy urban areas.
For hosts managing luxury or long-term rentals
If your property caters to high-end clients or families seeking long-term stays, VRBO might be more beneficial. VRBO’s focus on whole-home rentals and its platform geared toward vacationers can provide the stability and security you need, especially for those targeting guests who prefer to stay for extended periods. Furthermore, VRBO’s annual subscription fee structure can help reduce overall costs if you have frequent bookings.
For hosts seeking greater flexibility and exposure
If you manage a variety of property types, such as shared rooms, private apartments, or vacation homes, Airbnb offers more options to reach a diverse audience. Airbnb’s broad appeal and flexibility allow you to attract solo travelers, business professionals, families, and short-term guests. The platform’s higher traffic and extensive reach make it ideal for hosts who want maximum visibility and are comfortable with higher turnover rates.
For hosts managing unique or niche properties
Whether you’re offering a one-of-a-kind stay, such as a treehouse, a cabin in the woods, a room in a favela in Brazil, or a boutique city apartment, Airbnb provides the flexibility to market unique experiences. With a growing demand for experiential stays, Airbnb’s platform allows you to showcase these features to a global audience, increasing the likelihood of attracting adventurous travelers or those seeking non-traditional lodging.
For hosts prioritizing low-maintenance, high-revenue properties
If you’re looking to minimize the effort involved in frequent guest turnover, VRBO’s focus on longer stays may be a better fit. Hosts who want to manage fewer bookings but secure high-quality, long-term guests often find VRBO more suitable, especially in vacation markets or for second homes.
Final thoughts on choosing between VRBO and Airbnb
When deciding between VRBO and Airbnb, it’s essential to consider the types of properties you manage and the kind of guests you want to attract. VRBO’s focus on whole-home rentals makes it ideal for long-term renters, while Airbnb’s broad range of listing types provides flexibility and greater exposure. We recommend that property owners evaluate their goals—whether it’s maximizing visibility, minimizing fees, or focusing on long-term renters—and choose the platform that aligns best with their strategy.
FAQ
What payment options do Airbnb and VRBO accept?
Airbnb accepts several payment methods, including major credit and debit cards (Visa, MasterCard, American Express, Discover), PayPal, Apple Pay, Google Pay, and select regional payment options, depending on your location. VRBO, on the other hand, also supports credit and debit card payments, along with PayPal, but the payment options can vary depending on the property owner’s settings and the guest’s location.
Can I rent out my entire property on Airbnb and VRBO?
Yes, both platforms allow you to rent out your entire property. On Airbnb, you can choose between renting out shared spaces, private rooms, or entire homes. VRBO, however, focuses solely on whole-home rentals, making it an excellent choice for property owners who prefer to list their entire property for longer-term guests or vacationers.
How do I change my payment options on Airbnb and VRBO?
To change your payment options on Airbnb, log into your account, go to Account Settings, select Payments & Payouts, and follow the steps to update your payment method. For VRBO, go to your Dashboard, select Payments, and update your payout settings as necessary. Remember that changing payment details may affect your payout schedule, so ensure your information is up-to-date before accepting bookings.
