Vrbo vs Booking.com
This article examines Vrbo vs Booking.com by concentrating on the main features that an Online Travel Agency (OTA) should offer. The data has been collected from Vrbo’s and Booking.com’s websites and help articles.
Owner and Guest Fees
Owner fees:
Vrbo charges 3% if your guest pays with a credit card.
Vrbo has two pricing models. The annual subscription of $499 is worth it if you have an empty house and expect many reservations during the year. Paying 5% per booking fee suits you better if you invest in a short-term rental.
Guest fees:
Vrbo allows hosts to charge guests an additional cleaning fee in their total rates. They also encourage guests to rate the cleanliness of their place of stay after check-out.
Cleaning fees must be clearly stated on the first listing page of Vrbo.
Tax rules depend on local regulations and differ from city to city.
Owner fees:
Booking.com doesn’t charge any credit card fees.
According to Booking.com, property hosts pay between 10% and 25% commission, with an average rate of 15%.
The hotel base fee is 15%, which can rise to 18% if the host uses Booking.com’s member service.
Guest fees:
Booking.com doesn’t charge any commissions to guests. They allow property managers to charge extra fees for cleaning. However, they charge between 10% to 25% commissions to hosts for add-ons and cleaning fees.
You need to tick “No” to the question “Is this already part of the room/apartment rate?” if you want to get fees added to the price and shown separately in the invoice.
Tax rules depend on local regulations and differ from city to city.
Host & Guest Protection
Liability insurance
Vrbo’s Liability insurance provides protection for all reservations made through the HomeAway check-out process. It covers hosts up to $1 million if a traveller damages the property of a neighbour or the host is legally liable for guests’ injury.
Damage protection
Vrbo’s Property Damage Protection (PDP) is an optional insurance plan to protect guests from having to pay out of pocket for damaged property. The host can suggest an insurance plan level. Alternatively, guests can select a PDP level, whether as a refundable security deposit or a non-refundable amount.
Security deposits
With Vrbo, the damage deposit and amount are set upon the host’s request. Following check-out, they keep the refundable damage deposit for seven or 14 days. In the event of loss, hosts have seven or 14 days to claim all or part of a refundable damage deposit. Otherwise, the deposit will automatically be released.
Partner Liability Insurance
Zurich Insurance and its global partners underwrite this insurance. The coverage is up to €1,000,000 for European countries, £1,000,000 for the United Kingdom, and US$1,000,000 for the US and other countries. In the event of an incident involving more than 20 guests, the coverage is capped at €20,000,000.
To be clear, this is not a protection against property damage.
Partner Liability Insurance covers only:
- Bodily injury (e.g. if your guest breaks their arm slipping in the shower and holds you responsible).
- Third-party property damage (e.g. if your guest accidentally leaves a tap running and causes water damage to your neighbour’s apartment below).
What is Not covered:
- Damage and/or harm caused by pets (e.g. your guest’s dog injures a neighbour).
- Your own personal injury (e.g. you break your arm tripping over a step at the property).
- Damage or injury from something done intentionally (not an accident).
- Your own personal property (e.g. a guest breaks your TV or table)
It is your responsibility to ensure that your property is adequately insured in case of damage, as Booking.com does not offer separate insurance protection for its property owners.
Booking’s liability insurance does not extend to hotels.
Damage Deposit
A damage deposit is a predetermined sum paid by a guest that will be refunded if the property is not damaged.
Booking.com doesn’t collect security deposit payments for property damage on your behalf. Rather, you should make direct arrangements with guests and charge them either before or on arrival by cash or bank transfer. You need to share your damage deposit details on your house rules and also in the “additional fees & charges” section.
Booking.com can only ensure that your guests agree to your house rules before finalising the reservation. You can also report a guest’s misbehaviour, and Booking.com will consider blocking the guest from booking again with you.
Pre-Payment Deposit
In the case of partially refundable or non-refundable reservations, guests can pay either a portion or the total amount. So, you won’t lose revenue if they cancel after reserving and paying since they won’t receive their pre-payment back.
You’ll be able to impose a pre-payment on the guest’s card through Booking.com if you accept credit cards. Otherwise, you’ll need to get in touch with your guest and set up a payment.
Credit Card Pre-Authorisation
You can choose to pre-authorise and hold a certain amount of a guest’s card for non-refundable or partially refundable bookings. You can hold this amount as a guarantee if the guest doesn’t show up.
In case the guests’ cards can’t be pre-authorised or charged for deposit/pre-payment, you can mark them as invalid. Depending on when reservations have been made, the guest will have a limited time to introduce another valid credit card. If they fail to do so, you can cancel the booking so you will not be charged commissions.
You can also opt for no deposit, pre-payment, or pre-authorisation, but this is risky.
Smart Pricing
Vrbo offers its partners an online tool named MarketMaker™, which delivers detailed market data. It helps property managers set competitive vacation rental rates based on current supply and demand.
In addition to providing insights into market conditions, MarketMaker analyses real-time marketing data about your property, nearby properties, and traveller search behaviour.
MarketMaker analyses:
- Real-time supply and demand data.
- Competitive rates of booked vs unbooked properties.
- Local events affecting area travel.
- Forecasted occupancy data.
- Average rates of similar properties.
- Booking lead times;
- Search data from this year and last.
- Historical listing performance.
Booking.com allows you to automatically set rates for rooms with multiple occupancy options by using the derived pricing feature.
You only need to create a standard rate for each room according to its base occupancy or maximum occupancy. When occupancy increases or decreases, the system automatically adjusts the price by adding or deducting a percentage per person.
Cancellation Policy
Guest cancellation policy
On Vrbo, five levels of cancellation policies are defined: No Refund, Strict, Firm, Moderate, and Relaxed.
Due to its rental types, Vrbo is strict. Even the Relaxed option cannot provide a full refund since it only reimburses 50% if the cancellation occurs 14 days in advance.
According to Vrbo cancellation policies, refunds do not include the rental service fee.
Host cancellation policy
You can cancel an instant booking if guests do not comply with your house rules or Vrbo policies. To do so, it’s best to ask the guest to submit a cancellation request, so your metrics won’t be affected by the cancellation. If a guest meets all your house rules, the reservation should only be cancelled at the guest’s request.
For cancellations caused by factors beyond a host’s control, Vrbo offers “cancellation waivers.” You might qualify for a cancellation waiver based on your reason for cancelling, such as natural disaster, property damage, house rules violation, and past due balance. According to the Vrbo cancellation policy, a booking annulment negatively impacts your ranking metrics if you don’t receive a waiver.
At Vrbo, owners have the discretion to cancel a reservation. Thus, they can cancel a booking anytime, without worrying about any penalty or bad reviews.
Guest cancellation policy
On Booking.com, property owners can offer three types of cancellation policies:
Fully flexible: Your guests will only pay while staying at your rental and can cancel free of charge within your specified time frame.
Customisable: With this policy, you can determine how much guests will be charged if they cancel after a specific date.
Non-refundable: If you choose this policy, guests who cancel, change, or don’t show up will be charged the full price.
Host cancellation policy
If you have to cancel a guest on Booking.com for any reason, you can:
- Explain to the guest that you cannot honour the reservation, and show them how to cancel without penalty.
- Call Booking.com and explain that you need to cancel a booking – which costs you extra charges.
You won’t receive any automatic note in your reviews saying “this host cancelled,” and you won’t lose your preferred status.
Listing Rules
- Pets are also allowed with a fee for Vrbo properties.
- Vrbo owners can ask their guests to keep the property minimally clean. “This includes running the dishwasher, putting out the trash, or leaving all used linen in one area. The platform offers guidelines on how hosts can clean specific rooms in their properties.”
- You need to prepare:
- The list of your facilities and amenities.
- The layout of your property, including sleeping arrangements.
- Correct and complete address.
- At least one high-quality photo.
- Your property name can’t include any of the following:
- Punctuation marks like quotation marks (”), asterisks (*), and “at” signs (@).
- Capitalisation of whole words (except acronyms).
- Inappropriate words.
- House rules can be set for guests in these five categories: children, pets, smoking, parties or events, and quiet hours.
Review System
Vrbo has a review option, but does not offer a thorough vetting or verification process. Guests or hosts can leave a review for up to a year after their stay. Nevertheless, once one of the parties submits a review, the other party has 14 days to share theirs.
Vrbo uses a five-star rating system, and hosts’ responses to guest reviews appear in the review section.
Booking.com doesn’t offer reviews for guests that should be rated by hosts.
After guests check out, they have 90 days to review their stay. Guests rate their stay at your vacation home on a scale of 1 to 10.
They are also asked to rate the property in six categories: cleanliness, comfort, value for money, facilities, location, and staff. This part is optional, and your Guest Review Score is not affected by any of these ratings.
In addition, guests can provide optional ratings regarding different topics, such as WiFi and breakfast, which doesn’t count towards your Guest Review Score.
Payment Process
Vrbo offers hosts a secure payment platform to get paid through.
Following a guest’s check-in, you will receive your payout within one business day. New partners whose first booking is within 30 days will receive the payout about 30 days after the guest makes payment.
The payout summary report displays payout amounts after commissions and fees are deducted.
Due to the lack of a centralised payment system, Booking.com does not collect money from guests. So, the host is responsible for collecting payments, whether it is by credit card, bank transfer, or cash. For this reason, property managers usually charge deposits or pre-authorise payments to ensure credit card details are entered accurately so they can receive payouts.
You will need a payment processor in order to accept credit card payments.
Special Features & Services
Instant Bookings
Vrbo allows you to turn on or off Instant Booking on your listings.
The Instant Booking feature can determine your rank and search position, as the property with Instant Booking will rank higher on Vrbo.
Vrbo’s Trip Boards
Vrbo’s Trip Boards make it easy to organise and compare travel destinations. For group trips, guests can invite friends to collaborate on the board and search for accommodations together.
Partner Community
Vrbo also provides the owners with a website called the Partner Community that allows property managers to share their Vrbo experiences.
Vrbo’s Premier Partner Programme
It rewards owners and managers for providing excellent service to guests in a sustainable manner. Upon meeting the criteria, you will automatically be added to the programme, where you benefit from a Premier Host badge and filter, the Boost programme, as well as priority 24/7 support.
Instant Bookings
Booking.com hosts can receive instant bookings or review guest requests before accepting or rejecting them. To skip Booking.com’s instant booking, hosts need to choose “All guests will need to request to book” in their account settings.
Preferred Partner Programme
This Programme provides greater visibility to the top 30% of Booking.com partners in return for a small increase in commission. These vacation rentals are picked based on their performance score, review score, and external prices.
Visibility Booster
Booking.com offers a Visibility Booster tool that helps your listing rank higher, wherever and whenever you choose to.
In exchange for an extra amount you pay, you can give your property a competitive edge in times of low sales or high cancellations.
Booking.com Promotions
By using promotions, you’ll be able to offer discounts tailored to your business needs. Booking.com allows you to create different types of promotions, such as the Free Nights Deal, Last-Minute Deal, Early Booker Deal, Basic Deal, Secret Deal, Black Friday Deal, and Early 2022 Deal.
Vrbo vs Booking.com: Which One to Choose?
The process of listing your vacation rental on Booking.com and Vrbo is pretty straightforward and can be done in a few easy steps. But, choosing the right listing channel depends on your preferences, for example, regarding booking commissions and types of cancellation policies.
If you have a strict cancellation policy, you’d be better off listing your full house on Vrbo instead of Booking.com. In addition, your Vrbo net revenue (revenue minus commission) per booking is higher than that of Booking.com. There is usually a lower service fee on Vrbo, which makes Vrbo more affordable than Booking.com. However, Booking.com allows you to reach a larger pool of potential guests and receive more reservations.
We are committed to ensuring that all our comparison articles are factually entirely correct and accurate. If you have spotted anything that you feel is wrong or misleading in this article, we’d appreciate hearing from you.
