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Airbnb vs. VRBO

The Ultimate Matchup between the two biggest short term rental services. Is it worth using both? 

Comparisons Airbnb VRBO
Subscription Fee Free $349/yr.
Host Fee 3% 3%
Guest Fee 6-12% 4-8%
Insurance Included Additional
Payouts Upon Check In Upon Guest Payment
Tax Collection Yes and Remitted Yes but no Remission

Subscription Fee

Airbnb is free to use and does not require an annual subscription, whereas VRBO recently reduced their subscription to $349/yr. In doing so they are making attempts to increase the supply of inventory and also allow listings to compete on merit and not just on a tiered paid advertising subscription. This is a positive move for VRBO, but to make up for lost revenue they are also charging a higher guest fee. 

Host & Guest Fees

Both Airbnb and VRBO charge the host a credit card processing fee around 3% for each booking. Their guest fees are ranges, but we suspect Airbnb has a slightly higher traveler service fee than VRBO. We believe Airbnb makes up for this higher fee in several ways to be discussed. 

Insurance, Claims

VRBO offers a third party insurance package for guests to purchase. Homeowners can require guests purchase this insurance package, ranging from $59-$99 a booking. When factoring in this insurance package, VRBO fees are likely to be higher than Airbnb. We highly recommend insurance instead of deposits (see below). 

Airbnb does offer a $1M liability insurance policy for each booking, most applicable for bodily injury during a guests stay (read more here). In addition to this, Airbnb offers a robust Resolution & Claims center for both hosts and guests to make claims after a booking for damages, extra services performed, when amenities are promised but not delivered, etc. These claims are initiated directly and subsequently Airbnb offers up third party mediation for outstanding resolutions. We have had a 100% success rates on all claims made on Airbnb, ranging from smoking penalties, pet penalties, and general damages. 

Our conclusion is to never rely on insurance, as in most other times in your life, insurance claims can be extremely painful, cumbersome, and unsuccessful. We love Airbnb's Resolution Center as a much better, easier, and quicker way to work through booking issues. 

Insurance vs. Deposits

We no longer take security deposits for bookings. We have found a security deposit can be arbitrary and often our homeowners have lost money by not taking a high enough security deposit. Alternatively, homeowners may deter bookings when a security deposit is priced too high. We have had several cases on VRBO where a security deposit was taken and the damage reported exceeded this deposit and no other mediation was available. 

  • i.e. Hot tub cover damage was $550 and security deposit was $300
  • i.e. Mattress replacement was $2000 and security deposit was $500

Payouts

The one exclusive benefit to using VRBO (until recently) is payouts occur when a guest pays instead of when a guest stays. This means you can take a Holiday booking in July and receive the funds significantly in advance. VRBO also allows homeowners to adjust the number of payments a guest makes, making it easier to secure a booking.  

Airbnb will not allow a single host to adjust these payout preferences. In other words, payouts typically happen 3-4 days after a guest checks in. Airbnb has made exceptions for property managers (i.e. Us) to adjust payout preferences to be paid 30 - 60 days in advance of a booking. If cash advances are important for our homeowners, we are able to turn this feature on for a small increase in the service fee. 

The one disadvantage to this is the risk of cancelations. If a guests cancels before their no cancelation window, a homeowner does have to return the funds and this can make for a cash flow headache. 

Tax Collection

VRBO does allow you to charge additional for sales tax. They do not, however, remit this tax on your behalf. Instead they just make it easier to understand how much tax you owe on each booking. 

Airbnb recently launched a sales tax feature for the state of Colorado. This means each guest will pay applicable state sales tax and Airbnb will remit this tax to Colorado on your behalf. This means you will only need to remit tax to your local authorities (i.e. the Town of Breckenridge) when applicable. 

Overall, we see Airbnb's approach much better for homeowners - eliminating the need to pay two authorities. We do price on Airbnb with sales tax considerations, break down sales tax on our owners statements, and generally are able to receive higher rental amounts on Airbnb in lieu of this. 

Ratings and Listing SEO

Airbnb offers a much better system for ratings than VRBO. For better or for worse, Airbnb listings tend to receive more ratings than VRBO. This factors into the search results, in our opinion, more more transparently than VRBO. The goal is to optimize each listing such that it appears more frequently in search results. VRBO's old pricing model used to depend solely on how much a homeowner has paid to appear in search results. With the recent switch, as far as we can tell, VRBO has not spent a lot of time and effort into the variables that go into search results - i.e. ratings, photos, response rates, etc. 

Airbnb, however, offers a lot of opportunity to boost your listing search results. I touch on this briefly in another blog post (Five Must Know Airbnb Tips), but in short: Response rates, reviews, occupancy, SuperHost status, frequent updates, and utilizing newly release features all help to improve your listing visibility. 

Ease of Use for Hosts and Guests

Rental Pricing: Airbnb allows you to uniquely price each day. VRBO requires block pricing such that your 'Ski Season' rates are different than your 'Summer Rates'. This can make it easier to set & forget pricing, but can be very difficult to be granular with specific weekend pricing (i.e. Ice Sculptures or ULLR fest). Airbnb does also offer Smart Pricing and Price Tips based on their own pricing algorithms. These are great to refer to when trying to predict volume, but we do not typically recommend using exclusively. 

Communication (web, mobile): Airbnb by far allows for easier communication for both hosts and guests. VRBO has poorly executed their mobile app for travelers, making it very difficult for travelers to access the 'Hospitality' center with critical information unless they have the app downloaded. It is also very cumbersome for hosts to complete the information in each Hospitality Manager section. 

Co-Hosting: It is very difficult to share login credentials or co-host on VRBO. Airbnb's co-hosting feature allows you to add your significant other, your cleaning team, your property manager, etc. to assist with monitoring messages, viewing the rental calendar, and receiving payouts. We do not use the co-host feature very often ourself when exclusively managing brand new listings but often homeowners will have an existing Airbnb listing they will want us to work from and we are happy to implement co-hosting. 

Customer Service: Both Airbnb and VRBO do a great job with answering the phone. Often our issues with Airbnb are always resolved, whereas VRBO customer service is hit or miss. VRBO also outsources payment processing to Vacation Rent Payments so often you have to talk to both companies to resolve an issue related to payments. 

Size of Airbnb and VRBO Community

Finding this public data can be very challenging. It's possible to find the number of travelers on each platform, but it's difficult to know the 1) the number of travelers on each platform searching for Breckenridge rentals, and 2) the number of those searching travelers that book a rental in Breckenridge. Both Airbnb and VRBO rank #1 and #2 organically when you search 'Short Term Rental' and 'Vacation Rental' in Breckenridge, and I imagine they are constantly battling for the #1 spot. By and far, both platforms are significantly larger in search volume than using a traditional property management website. 

When looking at our units that are both on VRBO and Airbnb, the statistics break down as follows: 

  • 1-3 bedroom units: On average, 90% of our bookings are through Airbnb.
  • 4-6+ bedroom units: On average, 85% of our bookings are through Airbnb. 

It is most likely true this breakdown differentiate between how these platforms are used. We are able to utilize better SEO techniques on Airbnb and generally have a stronger presence than VRBO, therefore receive more inquires and faster bookings. 

Our Conclusion? 

Our primary goal is to increase both occupancy and net income for our homeowners. We evaluate each client's situation separately and make decisions best for them. When we do not feel we can reach the optimal occupancy exclusively on Airbnb, we will consider a VRBO listing. Generally speaking, we are able to achieve all of our homeowners goals exclusively on Airbnb.

The market for Airbnb in Breckenridge has more than doubled each year since 2011. We feel the supply of travelers on Airbnb has exceeded VRBO. A combination of ease of use, features resulting in higher occupancy, and similar fee structures Airbnb wins #1 in our head to head matchup.