As a vacation home owner, finding travel websites to list your property on so that it reaches the most eyes as possible and helps you bring in more revenue is important. Travellers are constantly comparing different sites to find the best deal for their holiday where they can have the best booking experience and don’t have to stretch their budget. So if they like a property on one website which is affordable and has reasonable ‘other’ charges such as cleaning, service, and cancellation fees, then they will not hesitate to confirm their booking.
In this article, we will be talking about the Vrbo fee that every traveller and vacation property owner is being charged for using the platform.
Let us first look at what it costs to be a host on Vrbo, followed by how these fees affect travellers.
Vrbo fees as a host
To get your property in front of as many travellers as possible, you will have to list your home on multiple platforms like AirBnB, HomeAway, Vrbo, and more. But like all good things in life, nothing comes free. So if you have decided to list your holiday home on Vrbo, then let us look at the different payment models that they offer.
Annual owner subscription model and fees
The annual subscription model that costs $499 would work best for a property owner who is expected to be booked up for most of the weeks out of the year or will earn $10,000 or more annually from their property. This fee allows owners to accept as many inquiries and bookings as they want to and also covers all the service fees that would otherwise be charged to their account when a guest is making a booking. If you have multiple properties, this is a great alternative to the pay-per-booking model.
Pay-per-booking model and fees
If you are new to the vacation rental industry, then you can begin with the pay-per-booking model to get your feet wet and see how it works. This model works best for owners who are only expecting their property to be booked for six weeks or less in the year or earn an estimated revenue of $10,000 or less. As an owner, every time a guest books your property, you pay a small fee to Vrbo. Let us see what that is:
5% commission on the rental amount, cleaning fee, pet fee, or any additional payment.
3% payment processing fee on the total amount you receive from the guest, including taxes and refundable damage deposits. (The processing fee that is charged for damage deposit is refunded when you refund the deposit to the guest.)
As a property manager managing multiple listings from a software, you will be charged a 5% booking fee made through Vrbo sites, which is calculated based on the rental amount and the mandatory fee (such as service and cleaning fees), and does not include taxes and refundable damage deposits.
If you think you are going to receive more rental income on your property or will exceed a certain number of bookings, then the annual subscription is likely the better option.
Vrbo fees as a customer
As a customer making bookings for an upcoming trip, there is nothing more annoying than seeing multiple fees adding up to the rental cost. Vrbo reported that customers were more likely to book a property that had one fee compared to three different fees. Let us look at all the different fees that can be included in your nightly room rental cost, to make sure the customer doesn’t abandon the checkout process.
1. Cleaning Fee
Cost: $30 – $200
Almost all Vrbo properties charge a cleaning fee which may differ depending on the location, size of the property, and the cleaner’s rates.Cleaning fees could include basic cleaning, laundering linens, restock amenities, and anything else that helps the renter create beautiful staging for the next guest.
2. Pet Fee
Cost: $30 – $150
If you are planning on bringing your pet along on your vacation, you must be ready to pay fees that most hosts charge, either as a refundable pet deposit or a flat fee. Since allowing pets could cause additional wear-and-tear to the host’s home, it is perfectly reasonable for property owners to add this charge to the total bill. If you are travelling with a service animal (which is not considered a pet), you can ask the host to remove this fee.
3. Service Fee
Cost: 7% – 10%
The service fee on a booking is calculated on the sum of the property rental amount, pet fee, owner fee, and cleaning fee. This percentage amount can vary between 7-10% and allows Vrbo to provide a safer and more secure booking experience with 24/7 customer support.
4. Extra Guest Fee
Cost: $75 – $100
Some one bedroom or two bedroom properties show up in your search results page if you are a group of 3 or 5 travelers, or state that you are travelling with a child. In this case you will see an ‘Extra Guest fee’ added to your total cost.
5. Refundable Damage Deposit
Cost: $200 – $500
While travelling as a large group, you may see a damage deposit added to your charge, which is usually refunded at the end of your stay, if the property is left the way it was. These are designed to protect the property owner, and encourage travellers to take proper care of the rental property they are using.
6. Owner Fee
Cost: $60 – $1000
On most Vrbo rental properties you will see one additional cost titled “Owner fees”, which includes a cleaning fee, pet fee, parking fee, administrative fee, and property fee. If you see this, it means the rental owner has combined all of the typical fees into one additional fee. This can be ideal, as many guests prefer to see one additional cost as opposed to two or three different costs added to the room rent.
7. Admin Fee
Cost: $100 – $300
Properties that are managed by rental/property management companies usually have an administrative fee that shows up as a subheading under Owner fee. This cost can vary from property to property.
8. Property Fee
Cost: $120 – $150
If the owner needs to pay a monthly amount on their property, which may be a part of their mortgage amount, you could expect some portion of that to be added to your total invoice, since technically you are staying at the property. You will be able to find this amount under Owner fees.
9. Resort Fee
Cost: $100 – $120
Since you can find hotels and resort listings on Vrbo, you will most likely see a resort fee along with a service fee added to the total cost. In this case, you probably won’t see other fees like cleaning or property fees, as the resort fee is mainly used for cleaning and housekeeping services.
10. Parking Fee
If you are booking a stay in a condominium or apartment that has paid parking, then don’t be surprised to see that cost built into your total bill. You can always request the owner to waive this fee if you are not going to be using the parking space.
We hope you now have a better understanding of the different Vrbo fees that you can expect to be charged as a property owner by Vrbo or while booking a stay on Vrbo. As a property owner you can try and build costs into your room rental so that you only display a service and a cleaning fee to a potential tenant, ensuring higher conversion rates and thus higher revenues for your property.