Should I use for my vacation rental? A brief history of the platform plus things to know…

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Should I use for my vacation rental transcript


Hey everyone, it’s John from Vacation Rentals with John. Thanks for joining me on another episode. Today I want to discuss why vrbo V R B O is still a force, and if you’re not using it in your marketing mix, I strongly urge you to consider using VRBO because it’s still popular and a lot of search is still happening on the platform. Airbnb’s brand has grown way faster than vrbo, and VRBO went through a lot of different changes since it was rebranded. However, both platforms still garner millions of search results, right? So those search results drive the traffic and they drive the leads for our vacation rental businesses, and there’s no reason why you shouldn’t be on both platforms. So in this episode, I’m gonna run you through the brief history of the platform, vrbo, and in some key facts that may help you understand the platform a little bit more.


So if you do decide to get started, you have more of a background on how the company operates, how the website works, and what it can do for you. So let’s get into the history of the VRBO platform, and I promise I will keep this short, but it’s just so you have the backdrop on what the company’s about. So vrbo iss an online marketplace for vacation rentals. It was originally known as Vacation Rentals by owner, and it is headquartered in Austin, Texas, and it’s actually owned by Expedia Group. And the VRBO website was created by a man named David Klaus, a retired teacher in 1995 in Aurora, Colorado, with the goal of renting out his Breckenridge Ski resort condo. The website got so popular in by 2006, they had over 65,000 rental listings and they were adding a hundred new listings every single day. They originally had a subscription business model, which I liked way more.


It was cheaper. As a host, you paid a flat fee and you were able to get as many leads as you want from that platform. But now they’ve since moved to this pay per booking model. So it was payment of an annual fee and it allowed you to list the properties on the website, but they moved away from that because it wasn’t making them as much revenue. In two TH 2006, VRBO was actually acquired by HomeAway. So many of you who have been in the game for a while, you do remember HomeAway was a dominant player. And VRBO as it exists today actually looks a lot like HomeAway did. When it was around. And in the late 2015, Expedia group actually acquired HomeAway, including vrbo. Now it was actually called V R B O, vacation Rental by owner V R B O, but they rebranded it to vrbo, I think it sounds cool, but it had a new logo, capitalization, and pronunciation, and they did this rebrand in March of 2019.


They also were both rebranded as vrbo. So HomeAway and VRBO, or HomeAway and V R B O were actually both rebranded as VRBO at that time. They went through tumultuous times and lots of criticism because they had a no refund policy during C O V I D, and people wanted to get their money back. Everyone was sick, they couldn’t travel, and they were really holding onto their money because that’s how companies roll. They definitely don’t want to give out refunds in mass. So they were criticized heavily because of that. They didn’t have a real good guarantee. They weren’t complying with their book of confidence guarantee. So people were really upset that they didn’t stand by their word at one time. And then there’s also the controversy of the hidden cameras in the bedrooms and then not compliance with rental laws and the cities they operated in.


But as a whole, VRBO has grown and it’s tremendously big today. And as of today, the platform actually has over 2 million properties listed in over 190 countries all across the globe and 48 million users. And it’s growing every day. This means as an owner, and if you choose to list your property on vrbo, you have access to millions of potential customers, which is a great thing. Now, Airbnb grew faster. So Airbnb now has 6 million active listings and it’s growing faster and faster each day. So a lot of this growth is actually causing the oversupply issue we are all facing, right? So it’s making it more competitive than it’s ever been. But many owners choose to list on both VRBO and Airbnb because they get that broad exposure to two different websites audiences. And that’s what I actually recommend is optimizing for both. Because the platforms are so similar, there’s really not a ton of differences.


So why not place yourself on both and give yourself the best chance of success, right? That’s what I would do. Now, what do you need to know about vrbo? So the search functionality used to be a ton better than Airbnb’s, but Airbnb did so many updates. It’s almost the same thing like when you open both websites. I have ’em actually both open on my MacBook right now, and you can see they look exactly the same. There’s very little differences aside from the color scheme and the layout of the page, but how you search for vacation rentals, it’s almost exactly the same at this point in the past, VRBO actually allowed you to sort properties that were pet friendly first, but since Airbnb did their update. Now you can do that in Airbnb too. So there’s not too many differences between how search works. The biggest difference that I like as a user is you can search properties that were highly rated for cleanliness.


Same if you want something rated highly for location. The filters in the search bar, it’s way better On vrbo. You could actually search for properties that are highly rated for cleanliness, which is a huge plus. Airbnb, you could see the reviews and you could search for properties that have good reviews, but you’re not gonna be able to be as granular as searching for properties with great cleanliness reviews, at least not at this point. That can change in the future because Airbnb’s always updating things. But if I go down to filters on Airbnb, you actually could filter by the type of place, price range, number of bedrooms, beds, bathrooms, what type of property, what kind of amenities it has, booking options, accessibility and features post language, but not yet by cleaning reviews. But that doesn’t mean air Airbnb’s not going to try to get that on their functionality.


I believe at some point they’re going to actually add that too, because they don’t want VRBO to have a competitive search advantage over them as a company. One key distinction is VRBO doesn’t really push private rooms. They focus on the whole vacation rental. So if you want to rent out a whole house and that’s what you’re looking for, VRBO is a way better place to look for this. Airbnb actually rents out all sorts of properties. You could rent out a a room in someone’s house private room. They’re pushing rooms because of affordability right now pretty heavy. But VRBO doesn’t allow you to do this. When you’re booking on vrbo, you’re offering, I mean, you’re booking a whole property, a whole vacation rental. If you’re an owner in there, you’re offering a whole vacation rental. And that’s a key distinction between the two platforms.


Booking.Com, although I’m not getting into it in this podcast episode, they offer everything like they’re most well known for hotels. So they offer vacation rentals, but they’re more well known for hotels. It’s like their big dominant focus. VRBO is more known for the whole vacation rental, and Airbnb’s known for having Airbnbs. Airbnb has created a brand out of our homes at this point. Now, what about customer and owner support? Well, I used to love vrbo customer and owner support. They actually would call me and ask me how my listing was doing. They had recommendations for me on how I could improve my listing, and they were actually really helpful because they wanted to retain their owners and they actually had a really good support on the guest side too. I remember traveling with them to Austin, Texas, and the support was great. They actually helped me all throughout the situation I was having, and I was really impressed with what they did.


Today, that’s not so true. They’ve moved more towards outsourcing and it’s really hard to get a human on the phone and they don’t really take as much accountability when things go wrong like they used to four or five years ago. So that, I don’t see a big difference between VRBO and Airbnb. Both of them have moved towards, you know, maximizing profit, right? And maximizing profit included doing cheaper customer service, right? And doing that, we sometimes feel not taken care of because when we need to get Airbnb on the phone, we have to request a phone call. And when they call us, there’s very little they can actually do for a situation. So that’s how I feel about Airbnb. VRBO is very similar. You have to wait for a phone call. Sometimes their chatbots are almost useless. So yeah, I wish the support was a little bit better on VRBO side like it used to be, but that’s just not the case today.


I hope it does improve at the time of this recording. Not impressed with either platform. Not to say they’re all bad, I’m just not impressed, which is cheaper. Is VRBO cheaper than Airbnb? Well, that’s a loaded question. There’s not an exact answer to that because I believe that depends on two things, the market you’re in, the actual market you’re in, and then the type of property you’re looking for. Because if you’re in Orlando, Florida looking for a luxury nine bedroom vacation rental with a bowling alley, I believe VRBO would be better for that because you’d actually get a more narrowed down search and probably a better experience if you tried to do the same thing on Airbnb. Airbnb doesn’t have the best reputation in terms of product in Orlando, Florida because you know, the pictures look one way and then most of the guests that get there disappointed with their stay.


So vrbo, at least in Orlando, Florida, I feel is better when you’re booking a family vacation. In terms of being an owner, I’ve seen owners happier with VRBO when they have a whole property to rent out. Airbnb is more popular now. The guests sometimes trend younger. They want more affordable deals. Now, this is not true in every market, but in Orlando, Florida, around Disney World, this is what I’ve seen as the trend. And that doesn’t mean you should not list on one or the other, or not book on one or the other. That’s just my personal and professional experience. But VRBO used to be cheaper overall because they didn’t have the tax itemization sorted out. So when you would look at two of the same listings, VRBO would be a little bit cheaper on the service fee and it would be a little bit cheaper on the tax side because the owners were paying the tax out of the rental income at one point.


But that’s since been changed, and now the tax is no longer, you know, a difference between two of the same listings on both platforms. But the service fee is a little bit cheaper on vrbo. Now, vrbo, Hass gotten more expensive, so I don’t want to say it’s cheaper because <laugh> in most cases it’s not that much cheaper. And I’m going to get into the service fees now. So service fees on both platforms. So on vrbo, in most cases, the guests pay less of a service fee, but it’s still six to 15% of total cost. And then VRBO is charging owners 5% commission and 3% for credit card processing. So when you put all that together in one big soup, it’s very expensive because I look at this as wallet share. And if the guest has a hundred dollars to spend and they’re charging $15 to the guest for a service fee, they’re charging you $5 commission and $3 for credit card processing.


That’s still a lot out of a hundred dollars, right? Just as a simple example, Airbnb, in contrast, most guest service fees are under 14.2% of the booking subtotal, but that’s still about $14 with my $100 example and host are paying $3. So that’s a lot of commission. And if you’re paying a property manager on top of that, another 20%, I mean, you’re left with what, like $60 or so. So it’s, it’s not cheap. Both platforms are taking money from both the owner host and from the guest. So vrbo sometimes trends a little bit cheaper, but not much cheaper. And that shouldn’t be the huge driving factor in which platform you prioritize because I believe both of them will drive results for you. Now, what’s important for all owners to understand is both of the platforms are very guest centric because they both are taking the view that the guest is paying for this.


And if you need support, they do try to support their host and owners, but they will usually take the guest side. So in a situation where the guest comes in, they smoke in the house, they break something, it’s your word against theirs, you need really good documentation on both VRBO and Airbnb. I really recommend taking photos and video with timestamp, having your cleaning crew do that because without this evidence and an invoice to go with everything that’s repaired, they really try not to pay you out. So you need 100% that documentation to actually be paid out on both platforms. Speaking of that, it was much easier to do security deposits on VRBO because Airbnb just has air cover. They don’t let you collect a separate deposit, but VRBO actually does have functionality built in where you can collect the deposits still. So in regards to protecting your property, VRBO is a bit better there, but it makes you sometimes less bookable because no one really wants to pay a security deposit.


However, guests that do pay a security deposit probably will treat your place a lot better than if they have no skin in the game, right? So that’s just my take on that. Guests on both platforms tend to be different. Airbnb guests usually don’t care as much about your property and they complain more VRBO guests are pickier in some sense, but they trend older and think a huge family gathering on their maybe your ideal type of guests and not, you know, weekend warriors are partys coming in. So that’s not to say both platforms always have that, you know, archetype of of guests. It’s just saying I’ve seen it more often than not. So if you’re trying to attract one group or not the other, it doesn’t mean don’t put your listing on both platforms because you’d just be like cutting yourself at the leg because you’re not gonna have as much exposure if you choose one platform and not choose to list on both on social media, you’ve probably seen tons of people say, Hey, I can help you make money on Airbnb.


It’s really easy, you know, you could just like go to a landlord, ask ’em to use a property, and then you can rent it to others. Well, there’s a lot of that on the Airbnb brand. Here’s less of that scamming us on the VRBO brand. However, short term rentals or whether you’re on Airbnb or vrbo, it’s, it’s the same thing. You just have to, you know, be a little bit more careful with Airbnb scams associated with their brand. Not as much with VRBO because VRBO brand is not as strong as at this moment. But vacation rental owners should use both as a way to market their properties. Both platforms also allow you to set your own clean fee. And vrbo, you could set your own itemized fees, although you shouldn’t put too many fees. It does scare away guests. It does have the optionality to add itemized fees on vrbo.


VRBO offers travel insurance for a fee for guests. Airbnb currently just started doing travel insurance, but it’s not as, you know, season of a program as what VRBO had to offer. But it doesn’t mean it’s not going to get better, because from what I’ve seen in improvements, every update from Airbnb, I am very impressed of how customer-centric they have become because they’re really listening to the problems on their platform and they’re actually making an attempt to fix it. Although a lot of us sometimes don’t feel that way because of our reservations. As a, as a company, they are making their user experience better. It’s just that they’re adding too much supply and it, it’s hurting all hosts financially across the board. But in terms of a search experience, Airbnb is crushing it and they are listening and making their search experience better. So I believe when Airbnb, you know, see something VRBO is doing well, they actually, you know, copy and get inspiration and they do that and vice versa.


So both platforms competing against each other really makes a search experience for guests a whole lot better. Now, the first time you’re using vrbo, it does take a long time to get paid just because they want to make sure from a security standpoint you’re not a scammer and that you can establish some history with them. So if you’re recently adding your listing to vrbo, the first three bookings usually take about a month to get paid out. But then subsequent payouts, they’re all under five business days. Airbnb does pay out a bit quicker than that. But in vrbo, the first payout will take a little bit longer. There are a lot of people online that complain that VRBO has really delayed payouts, but in 95% of the cases that is not the case. Sometimes there’s issues with those users’ tax IDs, sometimes there’s issues with their account which are causing these delays.


But usually VRBO is payment process is about five days, give or take five to seven days. Airbnb’s much quicker in that regard, usually get it weekly. But the payment thing should never be an issue like, they actually were holding payments because they were updating their financial infrastructure. And I believe it’s so scammy that a company would hold money from the people who fuel their business because they’re having an internal issue. So with, there were those issues this summer where they were delaying payment to their owners. And you definitely want to make sure whichever platform you’re doing, you know, you do due diligence, like listening to this podcast and doing your own research to make sure that how they pay out is understood by you and that you understand that nothing is a guarantee because these companies are very fluid and they change your policies every day.


And what happened last month may not happen this month. So there’s always a degree of risk, but that’s what you can usually expect for payouts with these platforms. Now, if you decide to list your property in vrbo, they have this area where you click list your property, you enter your address, and then they tell you how much you can earn a year. That estimate is wildly inaccurate. Like I entered one of the eight bedroom listings in Kissimmee, Florida and said I could earn up to $25,947 a year, which is less than a fourth of what that property grosses. And they’re saying they’re basing that on the top 10% of listings like mine, but it’s a wildly inaccurate estimate, so I wouldn’t go off of that. But they also have a fast start team that helps you create your listing. So getting it, it’s like if you have an Airbnb listing and you want to get a verbal listing set up, they help you with that initial setup, which is really nice.


 But that’s, that’s about it. You just have to like steer clear of, you know, that estimate they give you because it’s wildly inaccurate. So it’s just something to make note of. Now, the subscription model, there’s a lot of question on if you can just still pay that 499 a year and get the subscription model. They don’t want people booking on that because if you list your property at that, they make way less money from you. So the only way that I’ve seen you get this is if you call their customer support and basically tell them, I would like to list with you, but I don’t want to list with you at that cost. I would be happy to pay the subscription model, but that you used to have, but not the paper booking model. And they may tell you no, and it may take four or five phone calls, but if you push hard enough, they will make the option available to you.


 And it’s something that you can do and I’ve done with much success. So I do think you can benefit from asking, because if you look on Google, there’s a lot of blogs that say, Hey, yeah, they still offer this model, but it’s kind of outdated because they’re not prominently showing it as an option for you. You definitely have to ask for it to make that option available on your account on vrbo, but if you do get it, you can save thousands and thousands of dollars because it’s way cheaper paying that $500 and not, you know, every time you have a booking that you have to pay a commission based on a percentage, it’s really expensive. One time I had the most awesome annual pass at Walt Disney World, like it was the premium pass, I could go do anything at Disney. And then after Covid, I decided not to renew it.


And what did they do? They didn’t let me renew it. And I’m stuck with the Pixie pass, which is, it has the blackout dates, it’s, it’s not as cool, right? So this is the same situation a friend of mine had with vrbo. They let their subscription lapse in the pandemic and they tried to get it back and they wouldn’t let them get it back. So I do have friends that were unsuccessful in getting the subscription model back, but I also have friends that I know who have successfully opened a brand new account, never using vrbo, never used it, and they were able to get on a subscription model. So, you know, your mileage may vary, but it’s worth a shot. Now if you’re running a property management system, VRBO and Airbnb, they both integrate, they both have been around forever. You should have no issue connecting one calendar to the other.


If you’re in Airbnb and not on vrbo or you’re in VRBO and not on Airbnb, you don’t need a property management system to connect the calendars because both of those systems, both of those platforms have an option where you can copy and export your, I calendar, your, your calendar link from one to the other so it can prevent double bookings, prevent blocks, all of that bad stuff happening. Both platforms are set to work with each other without the need for property management system. So if you think you need to buy a property management system because you’re running multiple platforms in your marketing mix, that’s not accurate. You can operate without that. Just you need to understand how whatever platforms you’re using work with each other, which is not too difficult. I hope today’s episode on VRBO was helpful, at least to give you a background on the company, a background on their history and the most key differences that you need to be aware of between the Airbnb platform and the VRBO platform.


I do encourage you to explore both options because both of them will help you, you know, get in front of a broader audience and get more traffic, get more bookings on your listing. They’re both really great to use. Both have their pros, both have their cons, but if you want to maximize your chances of earning as much rental income as possible, I do urge you to consider both using both in your marketing mix. With that being said, thanks for tuning in today. If you want to support the show, you can help me by leaving a rating or review on Apple Podcast, Spotify or the podcast player of your choosing. These reviews actually do help a lot because if you don’t have, you know, a lot of people rating you, no one will find you. And then you know, our cause of making vacation rental learning accessible and free for all, it just won’t gain traction.


So the more people that we can get to rate and review the show, the more the show can survive and it helps me make more content for you. So if you could please take 20 seconds of your time and leave a rating or review, that would be so appreciated. Any feedback is welcome. And if you haven’t joined the Facebook group yet, I’ll include a link in the show notes. But in the Facebook group, I’m going to share lots of free resources, like spreadsheets you can use to do pricing analysis, free check-in instructions, checkout instructions, welcome books, things of that nature, things that I found helpful when I was starting this business, and that should just be free for everyone to use. And those resources, I believe will be a good starting point for any vacation rental owner looking to level up their vacation rental game.  So with that being said, until next time, friends, stay booked and take care.

Vacation Rentals With John is one of the fastest growing short term rental podcasts. The show has been growing in popularity because of its no BS, to the point lessons on how to grow and operate a vacation rental. Join the facebook group. To listen to any of the past episodes, check out this page.

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