Owners and Tenants beware: Airbnb vs. Vrbo

Navigating the differences between Vrbo and Airbnb can be confusing for both guests and owners.

Often owners will list their property on both sites and if the two platforms are not analyzed, guests can unknowingly pay more for a property on one site compared to the other.

Conversely, owners will realize less net proceeds from their bookings unless they know the numbers and structure their listings to account for those differences.

Learning curves

We’ve just completed an out of province rental project and it took time to accurately determine the differences.

Neither platform make it easy to make that comparison.

We found that Vrbo was charging us a fee of 8 per cent and then discovered that by submitting a $500 annual payment, that was reduced to only a 3 per cent Credit Card processing fee.

An option that may not be offered in the near future so it might be advisable to subscribe now.

As most owners who are listing the same property on both sites, would have a desire to achieve similar net proceeds from both sites, a guest will find that they will pay less on Vrbo.

In some cases, a platform will automatically collect a tax, and in some cases it’s necessary for the owner to login and program the applicable options to cover their tax requirements.

Both parties will find the following table I put together, helpful to determine those differences (this table is applicable to British Columbia; taxes in other jurisdictions will vary):

 AirbnbVrbo
Fee Guest Pays15 %8.7%
Fee Owner Pays3 %8% (or pay $500 fee then 3 %)
8 % Provincial Tax8 %8 %
3 % MRDT3 %3 %
7 day Booking Discount10 %10 %
8 % Prov. Tax on Clean Fee$575.00 x 8 %$575.00 x 8 %
3 % Prov. Tax on Clean Fee$575.00 x 3 %$575.00 x 3 %
Clean Fee (example amount only)$575.00$575.00
GSTDoes not Collect5 % Collects for Owner
Rebate Paid to Owner4.5 %0 %

It’s also worth noting that despite the hefty cost of Airbnb, it does not provide any live telephone support.

Any questions have to filtered through a cumbersome email process.

Unless an owner invests time analyzing their after-tax proceeds in each case, there could be a pretty big surprise at the end of the year.

The difference between the two daily base rates needs to be established by the owner.

Posted by Barry Stuart

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