Online travel agencies dominated the market place and have been a fruitful platform for property owners while giving guests the comfort of real reviews and variety of vacation homes to choose from.
The biggest ones in the market are Airbnb, VRBO/Homeaway and Tripadvisor/Flipkey. Booking.com recently penetrated into vacation rental space too.
What are Airbnb fees?
Airbnb charges the guest around 10-13% depending on the amount of the booking, the more you pay, the less % is the service fee. They do not hold a security deposit on your card, but if your host claims and documents damaged, you may be charged for it. They charge hosts 3%, which is kind of similar to credit card processing fee. They pay the host a few days after the guests check-in. Hosts have an option to eat up the guest service fee and pay all themselves.
What are VRBO/Homeaway fees?
They lately became more greedy every year after being acquired by Expedia. They did not use to charge the guest, but only host until 3 years ago but now similar to Airbnb, they charge the guest between 9-13% service fee. But for the host, there are two options: 1) Pay $499/yr listing fee plus 3% processing fee of bookings 2) Pay per booking model of 8% (of which 3% is processing fee). They charge the security deposit on guests card, and it is easier for host to hold the deposit against damage. Depending on the payment model, they pay the host around 5-7 days after the payment was made or guest checked-in. If you connect VRBO to your PMS such as Ownerrez, you are then supposed to collect all charges but VRBO booking fees (these fees are separately charged to the guest) using your own payment processor, which means you do not pay 3% processing fee and collect the funds immediately. In pay per booking model, they bill you for the 5%.
What are Flipkey/Tripadvisor fees?
They have always been charging the guests 8-16% booking fee (I believe it is a flat 15%), however lately they began not transparently displaying it as a line item, but embed into rent price. They charge the owners 3% as others do. Security deposits were used to held on the credit card, but again lately, guests reported that they did not see the security deposit. They pay the host after check-in.
How to avoid Airbnb, VRBO, Homeaway Service Fees?
It is not fair trying to avoid the fees which you willingly accept as a host. An honestly, we do not do it. However, for the guest, the situation is different. It can be a bit annoying to pay a hefty 15% on top of a $3,000 vacation.
Most hosts try to avoid a situation to divert the inquiries to direct bookings for not only fairness, but also the lesser you get bookings from OTA, the lower your ranking becomes in time. Also they would give up on the valuable review opportunity.
Sometimes, it is the guest, who wants to know how to book direct and avoid fees; otherwise he would not book your property. All the OTAs have policies against doing this, no surprise there. All these portals have sophisticated algorithms to prevent you from exchanging contact details before booking (one exception being VRBO, showing contact details to some trusted hosts in the inquiry). Tripadvisor filter can be so annoying, you cannot even share the Tripadvisor links of your other properties, it gets blocked. They also do not share the contacts until the last payment is done
For direct bookings to happen, hosts must have a platform to get paid. That could be by means of a professional looking website like this one, or sending a Paypal invoice (which may let guest feel secure knowing Paypal’s Buyer Protection, if not, they may feel suspicious). Hosts are also advised to keep a mailing list of the inquiries and past bookings, and use mailing platforms like Mailchimp (free up to 2000 subscribers) to send emails from time to time to remind themselves and divert guests to their booking site.
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