The world of tech (and especially startups) is littered with abbreviations, made-up buzzwords, and hard to pronounce names. While many have heard of Airbnb and HomeAway, most haven’t heard “V-R-B-O” spoken out loud too often. While it’s not particularly hard to say, it doesn’t exactly roll off the tongue either! This might leave some people wondering “What exactly does VRBO mean?”
What does VRBO stand for?
VRBO stands for Vacation Rentals By Owner, which neatly sums up what the business offers. It was founded in 1995 and has since shortened its name for marketing purposes.
Want to know more about what sets VRBO apart from its competitors and why some people choose one website over others? Keep on reading below!
Check Out This Rental Recon Article: Airbnb Essentials: 75+ Items Every Host Should Have For Guests
What is the difference between Airbnb and VRBO?
There are a few key factors that differentiate Airbnb from VRBO. First, VRBO is much, much older than Airbnb. VRBO was founded in 1995, when the internet as we know it today was in its infancy. The concept of an online classifieds section for vacation rental owners was a pretty groundbreaking concept, not to mention an ingenious one. Airbnb came along later in 2009, making it about half the age of VRBO.
VRBO was started as Vacation Rentals By Owner, and Airbnb was originally started as Air Bed and Breakfast. The two share that their names were both shortened after it was determined that more successful brands had snappier, quicker to pronounce titles.
Another thing that sets the two apart is the types of properties that you’re allowed to rent on each website. While they both support some pretty out-there rentals including castles, treehouses, yurts, and more, VRBO users are only allowed to rent out the entire dwelling. Airbnb allows you to rent out as little as one room, and doesn’t even specify if it needs to be a bedroom!
This gives hosts on Airbnb quite a bit more flexibility. Some people who host on Airbnb wouldn’t be able to do so on VRBO, such as those renting out a guest bedroom for some extra money. VRBO, as the name suggests, is for vacation homeowners and not just someone with some extra space to share.
The fee structure also varies pretty significantly between the two services. On Airbnb, hosts pay a flat fee of 3% per booking. Airbnb says that this is to cover the payment processing fee of their transaction. The money that Airbnb makes comes primarily from the guest, who is charged a variable fee of between 5-15% (sometimes more or less than that, even) depending on the total price of their stay. The more money they spend on a stay, the less the percentage fee will be in order to encourage longer stays and larger parties to use Airbnb.
On VRBO, guests are typically charged a pretty similar percentage fee to what Airbnb charges. Hosts, however, definitely pay more. They must subscribe to VRBO in order to list a property, unlike Airbnb which is free initially. There are two ways to pay for VRBO: either by paying an 8% fee per booking or by paying for a $499 annual subscription. This makes it quite a bit pricier to use than Airbnb for hosts.
Airbnb and VRBO both allow hosts to set their own cancellation policies, but with some stipulations. Airbnb has three different levels of strictness that hosts can choose from. Each level comes with its own predetermined rules from Airbnb. VRBO gives hosts complete freedom to set their own cancellation policies.
Finally, VRBO has only half the number of listings (2 million) that Airbnb has (4 million). This can likely be attributed to the fact that Airbnb accepts single rooms as listings whereas VRBO does not, so there are simply more properties that fall under Airbnb’s umbrella.
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Are VRBO and HomeAway the same company?
VRBO was acquired by HomeAway in 2006, so they are both part of the same company. This trips a lot of people up, as they don’t always make it 100% clear on each of their websites. Also, in my opinion it’s a little odd that they don’t merge the websites and search features into one. Both sites will give exactly the same searches, prices, and results.
Which short-term rental site do hosts prefer?
Depending on who you ask, it can definitely be a toss-up! There are lots of hosts who cross-list their rental properties on a variety of short term rental websites in order to maximize the amount of bookings they’ll receive. In these cases, it might not matter so much who they prefer since most of these services accomplish the same thing.
That being said, a lot of hosts prefer that Airbnb does not require them to pay to list their properties. If you’re a small host who only does a few bookings every now and then, or a seasonal host who earns the majority of your income in a short time, these fees can really add up and eat into your bottom line.
For hosts who don’t have an entire dwelling to list, they’re pretty much limited to listing on Airbnb as VRBO does not accept individual rooms. This makes Airbnb much more ideal for a lot of part time or casual hosts who don’t own a second home.
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Which site do guests prefer?
I don’t usually see as much of a preference differential on the guest side of things. The service fees for guests are comparable between Airbnb and VRBO, and the cost is usually the main concern for most people. Since costs tend to be comparable, there isn’t really a clear winner here.
The only exception I can think of is if someone really likes renting a shared space instead of being alone in a rental. In this case, Airbnb would be the obvious choice.
Both VRBO and Airbnb have a rich history. I personally am very interested in how these great companies have marketed themselves so successfully in early days of the digital world. Check out my [Airbnb Meaning Article] for an in-depth look at the story behind Airbnb!
Is VRBO safer than Airbnb?
Not necessarily. On paper, they are nearly equivalent in terms of safety. Both companies allow guests to rent out the homes of other people, which comes with its own inherent risks. The host verification procedures are pretty standardized across the board, and the main way that guests can determine whether or not a rental is right for them is by the reviews left by others.
The main difference between the two sites is probably where the difference in potential safety lies. On Airbnb, you can rent out a single room in a home that you could be sharing with strangers or a host family. On VRBO you must rent out an entire house (or apartment, or whatever else is available). In a shared Airbnb, there is a lot more potential for something to go wrong. If you’re in a home by yourself, you are somewhat more protected from theft or other serious issues.
Does VRBO make you pay upfront?
VRBO allows hosts to set their own payment terms that guests must adhere to. They can require payments upfront by choosing “1” in the Payment Terms section of their rate calendar on VRBO’s website (meaning that there will be one payment provided by the guest). Alternatively, they can allow 2 or 3 payments to be made and set the dates at which they require the payment before the booking. This is a nice flexible option for both guests and hosts alike.
VRBO also requires hosts to pay to use the service. This comes in either the form of a service fee paid per booking or an annual subscription of $499. It is up to hosts to decide which option makes more financial sense for their situation.