What is the VRBO service fee and why do I have to pay it? (If you want to know how to avoid the VRBO fees just skip to the end.)
We hear these questions all the time. With ski season in full swing and the beach season just around the corner, we thought we would do our best to clarify the new service fees that VRBO and Homeaway charge (and how to avoid the VRBO and Homeaway fees.)
The last few years have seen tremendous change and consolidation in the vacation rental world. Airbnb has risen from a small start up to a multibillion dollar company, Expedia spun off Tripadvisor and Flipkey, Homeaway purchased VRBO, and Expedia purchased VRBO and Homeaway. With all of the change going on, these large online travel conglomerates found new ways to increase their revenues, usually at the expense of the lodging property owners and management.
Many websites, Airbnb and Flipkey as a pair of examples, charge a percentage-based service fee or booking fee. VRBO and Homeaway have always been subscription-based websites. After Expedia purchased these websites, they decided to implement the service fee because they realized that they could make much more money than by just charging a subscription. Add on to the fact that they kept charging owners and managers a subscription and you get some really unhappy owners and managers in addition to the unhappy guests.
Normally, when a company charges for a good or service it gives its customers a good or a service. So what does VRBO give for its service fee? On their website here VRBO’s main reason for the fee is to cover the costs of running the website. In addition to this they list transaction security, customer service and the book with confidence guarantee as reasons for the fee. VRBO must realize that nearly every person that books online through their website uses a credit card and with the competition between credit card companies every listed benefit of the service fee has been a basic benefit of using a credit card since the beginning of credit cards.
Now for the really important part-How do I avoid paying the VRBO service fee? Or any of the Airbnb or Flipkey booking fees? It is very simple, truly book directly through the owner or management company! VRBO is no longer Vacation Rentals By Owner, it is VRBE, Vacation Rentals By Expedia and like any good middleman they want their cut. Any owner or good management company will have an easily verifiable online presence with reviews and a website. If you find a unit you like on VRBO, Airbnb, Homeaway or any other website with a service fee spend an extra couple of minutes to find the owner directly, it can save you hundreds on your vacation rental!