If you have a property and want to use it for short-term rental purposes, you must consider listing it on various platforms. One such platform in your list should be VRBO. Since VRBO is a brand of reputable Expedia Groups, one thing you can be sure of is you’re going to get bookings from relevant audiences and one key element is to understand how VRBO owner fees works.
VRBO currently has around two million worldwide listings, which makes it a popular name in the vacation rental market. The gist of the talk is VRBO is reliable and profitable, and if you’ve got a property to rent, make sure to list it on it.
But, before making a listing on VRBO, you should consider how much it costs to list your property on the platform. You need to consider the VRBO commission before setting your pricing.
Also, make sure to compare the commission VRBO is charging with other vacation rental platforms to make sure it’s worth the listing.
After you know the VRBO owner fees, you can make sound strategies to score more bookings with less commission or even no commission at all.
1. How Does the VRBO owner fees Work?
VRBO offers the rental owners two kinds of listing models. Either you can pay through their pay-per-booking billing method or the annual fee upfront. Most people choose their VRBO owner fees by pre-booking billing, as this way, owners are liable for only the reservations or bookings they receive. This VRBO owner fees billing method is flexible and straightforward.
If you are the vacation rental owner who gets their reservations from one channel, then the pre-booking billing method is the best for you. Also, with pre-booking billing, you can have the option to block your booking dates without worrying about the entire VRBO owner fees or VRBO commission that you have paid in advance.
On the contrary, if VRBO is your primary booking source and expects to make $10000 annually, it’s better to opt for an annual billing method. The yearly subscription comes for a $499 one-time annual fee, paid in advance. After that, you longer have to worry about having the Vrbo owner fees deducted from each booking.
2. How Much Is the VRBO owner fees?
If you’ve opted for pay-per-booking, then VRBO charges 8% from each reservation. Below is a detailed explanation of how the VRBO owner fees is charged:
5% VRBO Service Fee
The service fee is deducted by taking into account the total reservation amount. This also includes another additional fee too like cleaning and pet charges. However, tax is excluded and also the refundable fee that the guest pays.
The service fee that VRBO deducts contributes to the cost of product development, secure transactions, and the 24/7 customer care service of VRBO.
3% VRBO Credit Card Processing Fee
The fee is calculated from the total amount you’ve made from the reservation. It includes all the extra fees, security deposits, and taxes.
VRBO will return you the portion of the processing fee charged when you refund the profit in the case of deposits.
If VAT is applicable in your rental area, then VRBO will charge a 5% commission fee.
3. Why Do You Have To Pay The VRBO Payment Processing Fee?
Well, it’s a rule of thumb that you have to pay the VRBO credit card fee if you wish to list your vacation rental on the platform. It’s because VRBO charges each booking or guest for you. One benefit of payment processing by VRBO is that you don’t need your payment provider. VRBO is offering you convenience by taking the payment from the guests, and you get the amount in your payout, which is transacted one business day after your guest’s check-in.
4. How Can You Become Less Dependent On VRBO?
If VRBO is your go-to site and you rely only on it to get vacation rental bookings, it’s excellent because VRBO provides good earnings to too many owners. However, putting all your eggs in one single basket isn’t a wise idea. Why concentrate all your efforts and resources on one site when there are many vacation rental listing platforms in the market. Also, what if VRBO decides to increase the VRBO owner fees or change its algorithm? This could significantly affect the ranking of your listing.
So here are some ways to become less dependent on VRBO for your rental bookings.
a. List Your Property On Other Platforms.
Diversifying your strategy to score more bookings is the key to remaining steadfast in the vacation rental business and saving yourself from potential losses. While it’s true that VRBO is one of the great vacation rental listing platforms and offers you a lot of visibility, but one of the most significant drawbacks of it is that it charges more host fees than other platforms. Airbnb charges only 3% to most property owners who are slightly less than VRBO.
Also, the more the listing sites, the more will be your exposure, hence more chances of bookings.
b. Build a Direct Booking Website
The best way to cut out all the commission charged by VRBO or any other vacation rental site is to build your direct booking platform. You don’t have to pay any commission fee to any third party, which means more profit. You are the one that is in total control of your booking and will be independent of other channels.
c. Use Channel Manager
If you have your listing on different websites, then will be a separate calendar for each website where the visitors can see your availability. Now, it’s crucial to keep your calendars from all the sites in sync and constantly updated; otherwise, a double booking can be a task to handle because then you will have to risk your listing in anyone.
To avoid double bookings in one slot, you can use the vacation rental channel manager such as Hostaway and get help from managing your calendars by keeping them in sync.
Conclusion- VRBO Owner Fees
As a short-term vacation rental owner, it’s essential to know how much the listing is charging you regarding the VRBO owner fees; VRBO has made things clear and simple. There’s a percentage of commission that VRBO charges you from each booking amount. If you want to avoid deducting your owner fees from every booking, simply make a one-off payment in advance.
Please also read my post – How to Become a Successful Airbnb Host.
