Have you booked a vacation rental recently? If you’ve booked through Airbnb, Vrbo or the likes, you will have paid service fees. We advertise through Vrbo and Airbnb, truthfully we get the majority of our bookings through these booking platforms. There are additional booking sites, but these are the two we use and are familiar with.
How much is the service fee?
Both booking platforms charge the travelers a service fee as a percentage of the rental amount. With Vrbo it ranges from 6-12% of the rental amount. The total used to cap at $499, however in the past few years that cap was quietly lifted. In reviewing my bookings, I have one where the service fee is $586 for a two week booking. In addition to that, owners pay either a flat $499/year or 5% of booking income. Airbnb is free to owners to advertise, but charges travelers a cool 14.2% service fee on the rental. Both platforms charge the owners a credit card transaction fee of 3%.
Each guest who books one of our condos signs a rental agreement. In it we detail the nightly rate, fees and taxes among other things. We do not list the service fee. It is not covered by our rental agreement (we do not receive any of it). Should you cancel your booking, it will depend on the booking platform if they refund their service fee.
What value do service fees provide you?
I realize that there are costs involved in running a booking site, absolutely. Here are the services the booking sites say they provide travelers for the service fee:
Vrbo states: ‘This fee helps cover the cost of secure transactions, product development, and 24/7 customer service. Additionally, when a guest pays through our site, they are eligible for the Book with Confidence Guarantee.’
Airbnb similarly: ‘To help Airbnb run smoothly and to cover the costs of the products and services we provide, like 24/7 customer support, we charge a service fee when a booking is confirmed.’
Should you avoid the service fee?
If you have an established relationship with the condo owner, I would suggest you book direct and save the service fees. My rates are the same on Vrbo, Airbnb and book direct, the only difference being the service fee (of which I have no control). If friends or family have **recently** stayed at this condo and have an established relationship with the owner, you are probably fine to book direct.
Do search online to see if and how Vrbo or Airbnb have helped travelers when problems have occurred. Do the booking platforms actually help?
Why doesn’t the owner offer to book direct when you inquire via Vrbo or Airbnb?
When I list my properties on booking platforms, I agree not to take any of their bookings off-site (as this will cost the platform their service fees). As much as I would prefer to take your booking direct, the booking platforms can (and will) delist my properties if I’m found out. At this time I depend on them for bookings, so I am unable to take this risk. However….. I sprinkle the condo’s name throughout the listings. Some travelers pick up on this, google the condo by name (‘Palms at Wailea 503’) and find my website, Facebook, Instagram or even Youtube channel – yay!
How to pay for your vacation rental
This is just common sense, but if this is your first time booking a particular condo from a particular owner, pay by credit card. This gives you some recourse should problems occur. Note that most credit card processors charge owners a 3% transaction fee. If you have a recent established relationship with the condo owner, ask about cash discounts and mail a check instead. I have a number of repeat guests who do this. Others prefer to collect the airmiles which is of course just fine.
A word of caution
Unfortunately fraud is a thing in the vacation rental industry. Criminals post fraudulent listings for non-existent properties, or properties they don’t own. You can find fraudulent listings on Vrbo, Airbnb, Craigslist, Facebook Marketplace…. everywhere you look to book. Please be careful, use common sense.
Besides blatant fraud, there is also a problem of misrepresentation. Old photos, poor upkeep, shoddy cleaning, poor management. Read reviews carefully.
Take the time to phone the owner listed – you would be surprised how many people don’t!
Purchase trip insurance
Please do purchase trip insurance. When you book your trip, you never know what may happen. We’ve seen job loss, death in family, illness, change in circumstances, divorce etc. Read through the fine print as policies do vary widely – it can cover CFAR (Cancel For Any Reason), medical, cancellation, etc. Prices will vary based on what they cover. I do not sell trip insurance. I have personally purchased through Travelguard for a European trip a number of years ago, though we didn’t need to make a claim, so I can’t vouch for how good it was.