Vrbo Host Fees: Everything You Need to Know

Key Takeaways

• Vrbo offers hosts the choice of a pay-per-booking fee and an annual subscription fee, providing flexibility based on rental activity.
• Hosts should consider their property’s occupancy and income when evaluating cost-effectiveness of the fee models.
• All Vrbo hosts incur a 3% payment processing fee on transactions, which should be taken into account when pricing your property.

Becoming a vacation rental host means facing the unfortunate reality of Vrbo host fees—an essential aspect of STR hosting that’s often shrouded in mystery. But fear not! In this guide, we'll guide you through vacation rental host fees to help you maximize your revenue and outperform competitors. 

What Are Vrbo Host Fees?

Vrbo host fees keep the platform running. These fees help cover the costs of customer service, secure transactions, and platform improvements, all of which benefit hosts in the long run. 

Hosts pay to enjoy benefits like having Vrbo charge guests on their behalf and distribute earnings directly to hosts. Without this secure transaction processing, hosts would have to find their own payment provider. 

Vrbo Host Fee Structure Explained

Vrbo charges various fees, each serving a specific purpose and impacting hosts differently. Let's dive into the details of these fees:

Pay-per-booking fee

Hosts have two options when listing vacation rentals: Vrbo’s pay-per-booking fee or its annual fee.

If you opt for the pay-per-booking model, you’ll pay Vrbo a booking fee for each confirmed guest reservation.

The booking fee is broken down into two categories, for a total of 8% of:

• 3% payment processing fee 
• 5% commission fee 

The 5% commission fee is charged on the rental amount and any additional fees you charge the traveler (e.g. cleaning fees), excluding taxes and refundable damage deposits. Neither fee category applies to Property Damage Protection or Trip Cancellation Protection (Travel Insurance).

If you use a property management software (PMS) system, you’re charged an additional 5% booking fee for reservations made through a Vrbo-affiliated site. If the booking is not made through the Vrbo’s check-out, the charge goes up to 10%.

The pay-per-booking fee directly affects a host’s earnings from each reservation. Since this fee model allows hosts to pay only when they receive bookings, it can be an appealing choice for:

• Hosts just starting out or those with properties generating less than $10,000 annually.
• STR owners that rent out their property a limited number of days per year. This might be due to high seasonality in their area or because they want to occasionally use the property themselves.
• Vacation rental properties with lower average daily rates (ADR) and therefore smaller commission totals.

At the end of the day, you have to consider whether a pay-per-booking fee model will be cheaper and/or more manageable than the higher upfront cost of a flat annual rate. 

Annual fee

In lieu of the pay-per-booking fee, Vrbo offers hosts the option to pay an annual subscription fee.

At the time of publication in May 2024, Vrbo’s annual host fee is $699/year. Vrbo offers a 14-day window to cancel your annual subscription if you decide you want to switch to the pay-per-booking model. 

As a property owner, you’ll have to carefully assess this annual expense when budgeting for your rental business. The annual fee route could be the best option for you if:

• You prefer to have a fixed cost, which simplifies financial planning and avoids the variability of per-booking fees. 
• You manage a high-volume short-term rental. If your property is booked frequently, the total pay-per-booking fees could exceed the annual subscription fee.

For properties with high occupancy and substantial annual income, the annual fee provides better value. The subscription model also offers additional benefits, such as listing on international sites, access to reservation management tools, and the ability to upload up to 50 high-definition photos. 

Understanding the implications of the annual fee is crucial for property managers to make informed decisions about their Vrbo subscription and overall pricing strategy.

Payment processing fees

Regardless of which plan you choose—the pay-per-booking model or the annual subscription—you’re responsible for payment processing fees. 

Payment processing fees are charges incurred by Vrbo hosts for processing transactions made by guests. Vrbo’s payment processing fee is 3% of the total amount the guest pays, including tax and any refundable damage deposits. However, any processing fee charged on the damage deposit portion will be reimbursed to you when you refund the guest’s deposit.

While payment processing fees are a standard aspect of online transactions, they can impact host earnings. This is especially true for properties with high booking volumes. For hosts, payment processing fees represent a direct deduction from their rental income. 

We recommend incorporating payment processing fees into your pricing strategy to ensure that your rental rates cover these expenses while remaining competitive in the market.

Vrbo Fees for Guests

Hosts aren’t the only ones footing the bill for Vrbo services. When guests book a vacation rental on Vrbo, they also encounter various fees beyond the nightly rate. These additional booking costs contribute to the total price of their stay and ultimately impact their decision to book or not.

As a host, it’s crucial that you understand these fees so that your pricing strategy remains competitive yet reasonable to potential guests once fees are factored in.

Service fees

Guest service fees are one of the primary charges that travelers encounter when booking a property on Vrbo. This fee is typically a percentage of the total amount of the guest’s reservation, not including taxes and refundable fees. 

Vrbo service fees are intended to cover the cost of providing and maintaining the Vrbo platform, including:

• Customer support services
• Secure transaction processing
• Fraud protection measures
• Product development

Understanding the breakdown of service fees can help hosts budget and evaluate the overall value proposition of their rental property. Additionally, hosts should be transparent about Vrbo service fee amounts in their listings to manage guest expectations, build trust, and avoid any surprises during the booking process.

Security deposit

Security deposits serve as a form of property damage protection for hosts during a guest's stay. When guests book a property on Vrbo, the host may require them to pay a security deposit. The deposit is held by the platform until after their stay.

The typical security deposit ranges from about $250 - $500. Alternatively, some hosts prefer to charge the deposit as a percentage of the total booking—10% is a common percentage.

The purpose of the security deposit is to cover any costs associated with damages, excessive cleaning, or other unforeseen expenses resulting from the guest's stay. In the event that a guest damages the property, the host can claim a portion or the entirety of the security deposit to cover the necessary repairs.

For hosts, security deposits offer peace of mind and financial security. However, hosts should clearly outline their security deposit policies in their listings so that there is a mutual understanding between themselves and their guests. 

It’s also worth considering that even though it’s refundable, a hefty security deposit could deter a guest from booking with you. Savvy hosts should keep that in mind and price their security deposit in a way that strikes a balance between maximizing bookings and adequately protecting themselves. 

Standard fees vs. custom fees

There are two types of fees you can charge your guests: standard fees and custom fees. Some examples of standard fees include fees for:

• Extra guests
• Cleaning
• Pets

Custom fees are fees unique to your vacation rental business, not covered in Vrbo’s standard fees. Examples of custom fees include early or late check-in fees, parking fees in areas with limited parking, or utilities fees for extended stays.

Keep in mind that charging too many fees can dissuade travelers from booking your property. As such, the rule of thumb is to keep fees to less than 50% of your nightly rate. It’s also best practice to charge no more than two fees per booking.

How to add or edit fees for guests

If you’re a host looking to add or edit guest fees to your Vrbo listing, here are step-by-step instructions: 

1. Log in to your Vrbo account and select the listing you want to adjust fees for.
2. Click ‘Calendar.’
3. Click ‘Settings,’ then ‘Fees.’
4. Under the Standard Fees, choose up to three.
5. Select the Fee type, and enter the amount you’d like to charge.
6. Add any custom fee details if needed. 
7. Click ‘Save.’

How Do Vrbo’s Host Fees Compare to Airbnb’s?

Curious how Vrbo stacks up against Airbnb in terms of fees? Here’s a breakdown:

On Vrbo, hosts who opt for the aforementioned pay-per-booking fee model can expect to pay 8% of the total payment amount (as a reminder, that’s a 3% processing fee, plus a 5% commission fee).

On Airbnb, there are two host fee options:

1. Split-fee: This is the most common fee structure for Airbnb hosts. In this model, hosts cover a portion of the Airbnb service fees and push the remainder onto guests. On average, hosts pay 3% of the booking subtotal (which excludes taxes). That 3% might be higher, though, if the host has a certain type of listing—one with a strict cancellation policy, for instance.

2. Host-only fee: This less-common model is where hosts cover the entire Airbnb fee. On average, hosts pay 14-16% of the booking subtotal. Certain Airbnb listings, like hotel rooms, are required to use this fee model.

With all this in mind, the answer to whether Airbnb or Vrbo is cheaper to list on is…it depends. Factors such as daily rate, cancellation policies, and location will majorly impact the total fees you pay on both Vrbo and Airbnb. 

In terms of location, some cities or regions impose specific taxes or regulatory fees on short-term rentals. Platforms like Airbnb and Vrbo may collect these taxes on behalf of the host and remit them to the appropriate authorities.  In certain countries, Value Added Tax (VAT) or Goods and Services Tax (GST) may be applicable to the service fees charged by the platform. This adds an extra cost to the standard fees charged by Airbnb or Vrbo.

While both platforms aim to provide a convenient marketplace for property owners to list their rentals, the fee structures vary. It’s in your best interest as a host to carefully assess the fee differences between platforms, as well as the revenue you’re generating from each, to determine whether listing on both is worth it and at what cost.

Tips for Minimizing Vrbo Host Fees & Maximizing Rental Income

• Optimize Pricing Strategy: Regularly review and adjust your rental rates based on market demand, seasonality, and local events. You can attract more bookings and offset potential fee expenses by staying competitive with pricing.
• Utilize Long-Term Bookings: Encourage guests to book longer stays, as Vrbo's commission fees are typically lower for extended reservations. Offering discounts for weekly or monthly bookings can attract guests while reducing your overall fee burden.
• Maximize Direct Bookings: Direct bookings through your own website can bypass platform fees entirely. Invest in marketing efforts to drive traffic to your direct booking channels and build a loyal guest base.
• Minimize Additional Fees: Be strategic when setting cleaning fees, pet fees, and other additional charges. Communicate any extra charges to guests to avoid surprises.
• Consider Opting for an Annual Subscription: Depending on your rental volume, Vrbo's annual subscription plan may offer cost savings compared to pay-per-booking fees. Evaluate your booking frequency and choose the subscription option that best aligns with your rental business performance and future goals.
• Leverage Discounts and Promotions: Vrbo occasionally offers promotions and discounts for hosts, such as reduced commission rates for new listings or seasonal incentives. Stay informed about these opportunities and take advantage of them to minimize your fee burden.
• Invest in Your Property: Make your rental property more appealing through tasteful lighting, better bedding, or in-demand amenities to attract more guests and justify higher rental rates.

Final Thoughts on Vrbo Host Fees

Understanding Vrbo host fees is step one towards maximizing your rental income. Knowing what fees to expect and making informed decisions on the aspects of platform fees that you can control (e.g. the fee model), helps to minimize expenses and optimize profitability. Additionally, comparing Vrbo's fee system with other platforms like Airbnb provides valuable insights for strategic planning. 

If you implement smart pricing strategies, leverage promotional opportunities, and prioritize guest satisfaction, you’ll be well on your way to working the system to your advantage.