Home-sharing describes the process of sharing a property — be it a portion or the entire property — with people looking for short-term stays in exchange for money. In the last decade, home-sharing has become more prevalent across the globe, with businesses like Airbnb and Vrbo (Vacation Rental By Owner) gaining popularity.
The short-term stay rental sector presents a lot of advantages for renters, one being offering flexibility and a myriad of options for those looking for alternative accommodation. There’s a lot to be said about Airbnb and Vrbo from a customer’s perspective, but have you ever wondered what the key differences are between the two should you decide to host on either platform? Knowing the key differences between both platforms will help you make an informed decision about which platform to host your property on to receive a better return on investment.
A brief background of Airbnb and Vrbo
Established in 2008, Airbnb seeks to facilitate connections between hosts and customers in search of short-term rental stays. Operating in over 200 countries, the company boasts a remarkable portfolio of over 7 million listings, showcasing an extensive and impressive global presence, especially beneficial for hosts aiming to tap into a broader customer base.
Conversely, Vrbo, founded in 1995, offers 2 million listings across 190 countries. While Vrbo may not match the expansive reach of Airbnb, its association with the HomeAway brand enhances its potential reach. Once your property is listed on Vrbo, it gains the opportunity to reach a wider audience as it is also featured on other home-sharing sites under the Vrbo/HomeAway umbrella.
The similarities and differences between Airbnb and Vrbo
The obvious similarity between Airbnb and Vrbo is that they both serve as additional accommodation options for guests, outside of the traditional route of booking directly at a hotel. Other similarities include that both platforms charge service fees and both have cancellation policies and offer customers an opportunity to review the property they stayed at. While this is so, the way in which each of these factors are run by Airbnb and Vrbo differ greatly.
Service fees
Hosts on both Airbnb and Vrbo are required to cover service fees, which are imposed to ensure the costs of products, services, and customer support are adequately addressed.
Airbnb charges hosts approximately 3% for each confirmed booking, with guests responsible for the remaining service fees, typically amounting to under 14% of the booking subtotal (excluding Airbnb fees and taxes). Airbnb hosts have the option to charge additional fees to guests, such as cleaning fees, as well as fees associated with extra guests and pets.
Vrbo offers hosts two fee structures. The first option allows hosts to pay a $499 annual subscription, while the second provides the choice of a 5% commission for each booking, accompanied by a 3% credit card processing fee. The subscription model proves more cost-effective for properties with a high volume of bookings per year.
Cancellation policies
Cancellation policies are put in place to protect the host by setting out penalties for guests for unexpected cancellations.
Airbnb offers strict, moderate, and flexible cancellation policies. The flexible cancellation policy allows guests to cancel at least 24-hours before check-in and still get their money back. Using this type of cancellation policy on your Airbnb listing can attract many guests, but you may lose out on revenue if guests cancel unexpectedly. Booking greater than 28 days (Long term bookings) have a slightly different setup in that guests can cancel as long as this is 28 days before the next check-in date.
Vrbo offers 5 different cancellation types: no refund, strict, firm, moderate and relaxed. The most lenient cancellation policy, which is relaxed, only allows guests to cancel at least 14-days before check-in for a full refund.
- No Refund: No refund permitted.
- Strict: Full refund if canceled 60 days before check-in; no refund after 60 days.
- Firm: Full refund if canceled 60 days before check-in; 50% refund 30-60 days before check-in.
- Moderate: Full refund if canceled 30 days before check-in; 50% refund 14-30 days before check-in.
- Relaxed: Full refund if canceled 14 days before check-in; 50% refund 7-14 days before check-in.
Airbnb and Vrbo property types
Airbnb allows a variety of properties on its platform. For example, it’s very common to find houses, apartments, hotels, lodges, and even villas listed. Added to that, one can rent out a single room in a property on Airbnb. This provides flexibility for hosts as most types of property are allowed to be listed and for extra income, one can rent out different rooms in say, a house, to various guests.
Vrbo offers a diverse range of vacation rentals, allowing owners to list various properties such as cottages, bungalows, cabins, townhouses, villas, lodges, farmhouses, and more. Additionally, they provide the unique option to list boats, yachts, castles, and mills!
Types of guests
The types of guests you may expect from Airbnb and VRBO can vary based on the nature of the platforms. Airbnb tends to attract a more diverse range of travelers, including solo adventurers, couples, and groups seeking unique and local experiences. With its emphasis on shared spaces and a personalized touch, Airbnb often appeals to those looking for a more immersive stay. On the other hand, VRBO, or Vacation Rental By Owner, tends to draw families and larger groups seeking spacious and private accommodations such as entire homes, villas, or cabins. VRBO guests often prioritize comfort, convenience, and a home-like environment, making it a popular choice for family vacations or group getaways. Ultimately, both platforms cater to different preferences, offering hosts opportunities to accommodate a broad spectrum of guests.
Reviews on Airbnb and Vrbo
Guests on Airbnb have 14 days to leave a review after their stay. They can rate places based on cleanliness, communication, location, check-in, value for money, and whether the listing matched its description.
On Vrbo, both guests and hosts have one year to leave reviews. Each party can respond to their other’s review, but only within 14 days. Vrbo uses a 5-star rating system and its ability to allow hosts to respond helps other people get ‘both sides of the story’ instead of a myopic view of what it’s like to stay at an accommodation.
What platform is best for you?
Using both Airbnb and Vrbo can be beneficial as a host, particularly if you have a full-space accommodation that you’d like to be occupied. However, if you have an alternative space that you want to make extra income from and is close to urban areas, using Airbnb might be more suited for you. Ultimately, your choice in which platform to use will depend on how much service fees you can afford, what cancellation policy works best for you, the type of property you have, and the type of guests you’re looking to attract. If both match your criteria then use both to help maximise your bookings. If you’re using more than one provider then we suggest using a channel manager to help you manage listings, bookings and calendars.
Showcasing your property on Vrbo presents an excellent opportunity to boost visibility. Your listing won’t just appear on Vrbo; it will also feature on its affiliated platforms like HomeAway, Expedia, Trivago, and KAYAK, significantly expanding its reach. This increased exposure is likely to attract a higher number of guests, translating into enhanced profitability for you as a vacation rental homeowner.