Comparison of Airbnb and VRBO | BiggerPockets Blog

There are plenty of platforms that short-term rental real estate investors can use to market their space, but two of them make up the lion’s share of the industry: Airbnb and VRBO (vacation rentals by owner). While their core functions are similar, Airbnb and VRBO have several key differences in the types of properties available, target audiences, fees and commissions, and much more.

Let’s match Airbnb against VRBO to determine which platform best fits your investment strategy.

What is Airbnb?

Airbnb’s mission is to “secure the power of space sharing, resources, and support in times of need.” The platform started in 2007 when two hosts welcomed three guests to their San Francisco home. Sixteen years later, the platform has grown to more than 4 million hosts and more than 220 countries and regions all over the world.

As of December 31, 2022:

More than 100,000 cities and towns have active Airbnb listings
There are 6.6 million active listings worldwide
The hosts have accommodated over 1.4 billion guests

What is VRBO?

VRBO’s mission is to “find the space every family needs to relax, reconnect, and enjoy valuable time away together.” They have been pairing up homeowners and families looking for places to stay since 1995 and have grown into a global vacation brand with over 2 million complete homes actively available on their platform. VRBOs are currently available in nearly 200 countries.

Airbnb vs VRBO Comparison: Types of Properties

The most obvious difference between Airbnb and VRBO is the types of homes available on each platform.

Airbnb offers just about every space imaginable. You can stay in mansions, tree houses, houseboats, private islands, caves, containers, windmills, and everything in between.

These spaces are divided into four distinct categories:

full space: Guests have the entire space to themselves, which typically includes a bedroom, bathroom, kitchen, and a separate dedicated entrance.
traditional hospitality spaces: These rooms indicate that the host offers the same customer service and hospitality that guests may experience at a hotel. Hostels, bed and breakfasts, and similar properties are also included in this category. Hotel rooms usually have a common area for guests to interact with each other.
Private rooms: Instead of having an entire space to yourself, you are renting a room on a property that may be occupied by others. They are great for guests who want a bit of privacy but don’t mind sharing common areas.
Shared rooms: Shared rooms are great for travelers who want to socialize and don’t mind a lack of privacy. You will sleep in shared spaces when you book a shared room.

VRBO only offers entire spaces, such as apartments and vacation homes. This is one of the reasons why VRBO has about 2 million listings, while Airbnb offers more than three times that amount.

Related: The Ultimate Guide to Top-Notch Airbnb and VRBO Listings

the target audience

Airbnb markets to a wide range of people looking for an alternative to hotels. The target market for VRBO is more specific. It is marketed to families who are vacationing together and want to spend more quality time with each other.

Here’s a breakdown of who will be staying at each location:

	Airbnb	VRBO
Guests between the ages of 18 and 24	15%	13%
Guests between the ages of 25 and 34	36%	22%
Guests aged 35-54	36%	37%
Guests over 55 years of age	13%	28%
male guests	46%	54%
female guests	47%	53%

Fees and commissions

Airbnb and VRBO allow you to set up and list your property for free and offer liability coverage at no additional cost. Both systems require you to pay a host service fee when you monetize your property, but they offer different options for you to consider.

Airbnb hosting fees

Airbnb offers two fee structures: a split fee and a host-only fee.

Split fees allow you to split costs between the host and guest, with the guest paying the lion’s share of it. Here, the host pays a 3% fee (or more if you have “very strict” cancellation policies or you’re included in Italy) determined by the booking subtotal and automatically deducted from your payment. Subtotal computes:

price per night
cleaning fee
Additional guest fees (if applicable)

The guest service fee is typically less than 14.2% of the reservation subtotal, including the above fees.

Here’s what it would look like if your Airbnb guest booked four nights for $200 a night:

$200 x 4 = $800 + $100 cleaning fee = $900 subtotal
$900 x 3% = $27 Host Service Fee
$900 – $27 = $873 total earning for the host
$900 x 14% = $126 guest service fee (including taxes and occupancy)
$900 + $126 = Total cost $1026 for guest

The host fee just means that you, as the host, cover all additional costs, usually between 14-16% of the booking subtotal. This fee structure is mandatory if you offer traditional hospitality space (eg, hotel rooms, hostels, bed and breakfasts, etc.).

Here’s what it would look like if your Airbnb guest booked four nights for $200 a night:

$200 x 4 = $800 + $100 cleaning fee = $900 subtotal
$900 x 15% = $135 host service fee (including taxes and occupancy fees)
$900 – $135 = $765 total earning for the host
$900 = Total guest cost

VRBO Hosting Fee

VRBO also offers two fee structures: subscription and pay-per-booking methods.

The subscription model covers unlimited reservations for a full year for $499, paid a year in advance. This plan is the way to go if you book more than $6,250 annually.

The pay-per-booking model charges you 5% of the reservation subtotal and an additional 3% payment processing fee for the total amount. Like Airbnb, the subtotal includes:

price per night
cleaning fee
Additional guest fees (if applicable)

Here’s what it would look like if a VRBO guest booked four nights for $200 a night:

$200 x 4 = $800 + $100 cleaning fee = $900 subtotal
$900 x 5% = $45 host service fee

Let’s say taxes and surcharges add up to $150:

$900 + $150 = Total Payment Amount $1050
$1,050 x 3% = $31.50 payment processing fee
$45 + $31.50 = $76.50 Total Host Fee
$900 – $76.50 = $823.50 total profit for the host

Airbnb vs VRBO Comparison: Property Damage Protection

Compared to other rentals, vacation homes are more likely to incur property damage because more people use them. Understanding these risks, Airbnb’s Aircover for Hosts and VRBO Host Insurance offer host damage protection.

Aircover for Hosts provides “comprehensive protection for hosts”, including:

Reservation check
Verify the identity of the guest
$3 million for Host Damage Protection
$1 million for host liability insurance
One million dollars for expert liability insurance
24-hour security line

Aircover for Hosts protects your property while hosting guests. However, you will still need personal insurance if something happens to your property when you don’t have guests.

VRBO Host Insurance provides $1 million in initial liability cover at no additional cost, protecting you from any property damage or travel injury claims brought against you. If you do file a claim, it is recommended that you do so as soon as possible. VRBO Insurance Services are available 24/7.

Airbnb vs. VRBO: Cancellation Policies

Airbnb and VRBO both have many cancellation policies. Here are your options for each:

Airbnb’s cancellation policies

flexible: Guests are fully refunded up to 24 hours prior to check-in. If they cancel within that window, you will be reimbursed for each night they stayed + 1 additional night.
Moderate: Guests are fully refunded up to five days prior to check-in. If they cancel within that window, you will be reimbursed for each night they stayed + 1 additional night + 50% on all unspent nights.
firm: Guests are fully refunded up to 30 days prior to check-in. If guests cancel between seven and 30 days before check-in, you will be reimbursed 50% of all nights booked. You will be fully reimbursed if they cancel within seven days of check-in. Also, if the guest cancels within 48 hours of booking, they can get a full refund if they cancel at least 14 days before check-in.
firm: If guests cancel within 48 hours of booking, they can receive a full refund if they cancel at least 14 days prior to check-in. If a guest cancels between seven and 14 days before check-in, you will be reimbursed 50% of all nights booked. You will be fully reimbursed if they cancel within seven days of check-in.

Airbnb hosts can also set long-term “hard” and “strict” policies, “very strict” policies, and a non-refundable option.

VRBO Cancellation Policies

No Refund: All reservations are non-refundable.
60 days policy: Guests are fully refunded up to 60 days prior to check-in. Reservations are non-refundable within 60 days of check-in.
60/30 days policy: Guests are given a full refund up to 60 days prior to check-in and also receive a 50% refund (minus the service fee) if they cancel between 30-60 days from the time of check-in. Reservations are non-refundable within 30 days of check-in.
14/30 days policy: Guests are given a full refund up to 30 days prior to check-in and also receive a 50% refund (minus the service fee) if they cancel between 14 and 30 days from the time of check-in. Reservations are non-refundable within 14 days of check-in.
14/7-day policy: Guests are given a full refund up to 14 days prior to check-in and receive a 50% refund (minus the service fee) if they cancel between seven and 14 days from the time of check-in. Reservations are non-refundable within seven days of check-in.
custom policy: Hosts can set their own cancellation policy terms.

Which platform is best for me?

Airbnb is more flexible simply because you can offer all kinds of spaces, while VRBO requires you to rent an entire space. However, Airbnb and VRBO are great platforms for beginning investors and homeowners interested in getting into the short-term rental space.

Many real estate investors have turned hosting into full-time jobs by running multiple vacation rentals at once, and with enough experience and knowledge, you can too!

Build long-term wealth with short-term rentals

Vacation rentals can be a very profitable way to increase your monthly income – but only if you acquire and manage your property properly. This definitive guide to analyzing, buying, and managing vacation rental properties will set you up for immediate success and long-term wealth.